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Barkerville defeats late attempt to add nominee

2013-04-15 20:47 ET - Street Wire

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by Mike Caswell

Barkerville Gold Mines Ltd. has defeated a court application by shareholder Rex Harbour, in which Mr. Harbour had complained that the company rejected one of his board nominees for no good reason. A judge has found that Mr. Harbour submitted the nomination too late for it to be effective. A prior court order had given Mr. Harbour until March 4 to submit his nominees, but he did not meet that deadline.

The decision comes just days after Mr. Harbour filed an application in the Supreme Court of British Columbia complaining about Barkerville's rejection of Andrew Gustajtis as a nominee to the company's board. Mr. Harbour said that he had submitted the necessary papers to nominate Mr. Gustajtis, but the company omitted him from its information circular. Mr. Harbour asked the court to declare Mr. Gustajtis eligible for election at the company's April 16 AGM.

The matter came before Justice John Steeves, who heard from lawyers for Mr. Harbour and Barkerville during a one-day hearing on April 11. In his ruling, Justice Steeves sided with Barkerville, finding that the nomination was simply too late. The deadline for Mr. Harbour to nominate directors had already been settled through a prior court order. That order, which came after a dispute over the timing of the AGM, gave Mr. Harbour until March 4 to submit his nominees. Since he submitted Mr. Gustajtis's name after that date, the company was not obliged to accept it.

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I find this haggling about seats disconcerting, to say the least. Much more important is the fact that one of the biggest gold discoveries ever seems to be unverifyable, thus resulting in no lifting of the trading ban. Whoever is in charge after the general meeting would do well to address that issue. It seems that our present leader Frank has little interest to resolve this. If the trading ban stays in place, he effectively "loses" a lot of disatisfied shareholders. Would that not be a nice coup for him! Just watch how many shares don't vote and you can imagine the disgust among the shareholders. All he needs to do is cause a default on his personal loan to the company and he can take it over quite legally. What a way to get rich!

Posted by OPA at 2013-04-16 16:15

I find this haggling about seats disconcerting, to say the least. Much more important is the fact that one of the biggest gold discoveries ever seems to be unverifyable, thus resulting in no lifting of the trading ban. Whoever is in charge after the general meeting would do well to address that issue. It seems that our present leader Frank has little interest to resolve this. If the trading ban stays in place, he effectively "loses" a lot of disatisfied shareholders. Would that not be a nice coup for him! Just watch how many shares don't vote and you can imagine the disgust among the shareholders. All he needs to do is cause a default on his personal loan to the company and he can take it over quite legally. What a way to get rich!

Posted by OPA at 2013-04-16 16:15

"All he needs to do is cause a default on his personal,loan to the company and he can take it over quite legally"

I'm no fan of frank, but you don't know the exact terms of the loan and neither do I.

Any directors who would approve such a risk might be in breach of their fiduciary responsibilities and subject to legal action by shareholders.

Having said that, it's becoming clearer that stakeholders might have suffered irreparable damage, a circumstance made all the more aggregious as a consequence of gold breaking down and collapsing to potentially record lows in the days to come with no chance of escape whilst the affairs of the company are being inspected.

To be trapped in a cease traded stock which may possibly be permanently halted or delisted depending upon regulatory consequences while others enjoy freewheeling liquidity is a worst case scenario to many such affected owners of this hapless comedy of needless errors.

Someone must be held accountable.

Posted by Birdcat at 2013-04-16 18:44

Sorry, That should read "egregious".

Posted by Birdcat at 2013-04-16 22:29

This bickering between Frank and the investor is costing the average shareholder a lot of legal fees that should be going towards directing the project to a development stage. I'm happy to not be an investor of this. Best of luck to those who are involved.

Posted by Disappointed at 2013-04-17 10:13

Regarding the posting by Birdcat, the loan given to the company by Frank is described in detail in a Bulletin posted several month ago. The loan is so onerous that it is obviously aimed to break the company (like 20% interest and other items e.g. short terms etc.).So, think as you may. More power to you if you think this is positive given the fact that the report of the AGM makes no mention of the over eight months suspension, and we get constant reminders that he is still working on solving the matter. By the way, can Birdcat name any director that has had legal action for "breach of fiduciary duty"? What a joke!

Posted by OPA at 2013-04-18 02:34

Reply to OPA: I am familiar with the bulletin issued regarding the loan. It is however, not the entire document, and without a review of the entire document and an independent legal opinion we can't judge the consequences of any default. Any directors approving a transaction knowing that it could be contrary to the interests of the shareholders may be subject to potential legal action by the shareholders. For this entire event event to occur and not attract a lawsuit from someone, or some group of shareholders, would be, in my opinion, unlikely. I suspect somebody, somewhere is preparing for war.

To be clear, and so there are no misunderstandings, I stated above that I am no fan of Frank, and never have been. I agree the arrangement is structured to benefit the lender. I am also of the opinion that recent events may have ruined the company beyond any repair, and I do not think any of these circumstances are positive in any way whatsoever.

Furthermore, as I have long since sold any shares I owned in this company and any others Frank is involved with, I am able to make my observations objectively. I have no stake in this drama, but I am like many others, curious as to the eventual outcome.

None of this helps the market, and In spite of my opinion of management I do not enjoy watching or hearing this.

Good luck to you and the company.

Posted by Birdcat at 2013-04-18 15:29

"You don't know the exact terms of the loan and neither do I"

Those are the words of Birdcat to myself, but as you can read above, when I pointed out that I can recognize the meaning of numbes like 20% interest and short terms like 6 months, he admited that he read that, too. How funny!

He still maintains that Directors can be made responsible. I guess he does not know how they are nominated and appointed. Frank accepted one nomination from a shareholder but fought tooth and nail to stop any others. Further, he immediately expanded the Board by three votes to make sure that this "outsider" is outvoted. It is called "keeping control".

My comment to Birdcat: Welcome to the real world. Maybe you should give up dreamland. Then, you don't need to wish anyone good luck, either.

Posted by OPA at 2013-04-20 04:12

To OPA:

Hello friend. As I wrote, I have no stake in this. I can only surmise you are a trapped shareholder. I essentially agree with all your points. I have added that my opinion is that if there was collusion and it can be proven that shareholders have grounds for legal action if the company assets revert to Frank upon such an event resulting from a default.

I am neither naive nor a fan of Frank or any of his management, which, just so there's no misunderstanding, I also agree are appointed as yes men.

I'm not in dreamland and I'm not invested in this 'nightmare'. I sold all my mining and energy stox last year and I'm fishing in biotech and other sectors.

Again, good luck. You'll need it with this collection of what I consider to be stooges.

Posted by Birdcat at 2013-04-20 22:45


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