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by Mike Caswell

Calais Resources Inc. has filed a lawsuit in the Supreme Court of British Columbia against past and present members of its management, claiming that they fraudulently transferred out the company's assets, which included two permitted mines. The company had valued the projects at $106.3-million, but disposed of them for $100,000, according to the suit. (All figures are in U.S. dollars.) The lawsuit seeks court orders that would declare the transfer to be a fraud, among other things.

The allegations are contained in a notice of claim that Calais filed at the Vancouver courthouse on Thursday, Sept. 22. The defendants include the company's former chief executive officer, David Young. Also named are three present directors: Thomas Hendricks, Andrew Russell and David Russell. (The Russells are brothers.)

The problems, as described in the suit, go back to June, 2015, when Calais's largest shareholder started questioning the actions of the company's management. That shareholder, identified in the lawsuit as Aurum LLC, owned about 78 per cent of the company's shares. It had sought an annual general meeting, but management refused to call one, the suit states. Instead management made an effort to dilute Aurum's holdings to that of a minority shareholder, according to the suit. Aurum had to go to court and obtain orders invalidating the issuance of 4.75 billion shares and restoring its status as the majority shareholder.

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