An ongoing settlement dispute at Boss Power has set that company alight, with a proxy war, director resignations and press release allegations flying back and forth leaving scorched earth in its wake.
It started with a lawsuit against the government. It’s going to end with a proxy fight at an AGM.
On March 12th, 2009 the Government of British Columbia issued an order barring the Chief Mines Inspector from issuing work permits to uranium and thorium explorers. International Montoro Resources sued B.C. for the expropriation of their Cup Lake/Donen Deposit, and Boss Power (TSX:V.BPU
, Stock Forum
) followed suit, looking for damages for losing their Blizzard deposit.
Boss would eventually receive $30 million plus costs in compensation for their troubles.
Or, rather, should have received. Anthony Beruschi owns B claims connected to the settlement and, according to Boss executives, wants more than his fair share of the compensation before he’ll sign off.
According to Boss, “the Company has been unsuccessful in reaching an agreement with the beneficial owner of certain properties (the "B Claims") that are peripheral to Boss Power's Blizzard Properties and are required to be surrendered to the Province of British Columbia in order to complete the Settlement. The beneficial owner of the B Claims is Mr. Anthony Beruschi, a former director of Boss Power. Mr. Beruschi is also the sole director and President of Morning Star.”
Beruschi says the legal action was news to him.
“The truth behind the B Claims is simple,” Beruschi said in a Morning Star news release. “Boss does not own the B Claims. Boss knows that it held (and holds) the B Claims in trust for the beneficial owner, Mr. Beruschi, the president of the Concerned Shareholder. Boss included the B Claims in the $30 million settlement without informing Mr. Beruschi or obtaining his consent, contrary to the express trust obligations under which Boss held title to the B Claims.
“In fact, certain members of Boss's management involved in the settlement concealed this fact from Mr. Beruschi when he specifically inquired why the Province was insisting on delivery of his B Claims before paying out the settlement. It was not until approximately 2 months after the settlement in mid-December 2011 that Mr. Beruschi was partially informed by Boss's management that his B Claims had been wrongfully included in the settlement by Boss.
“Not only did Mr. Beruschi have the right to know the truth as the beneficial owner of the B Claims, but also as a director of Boss at the time. It is alarming that this information was purposely kept from him. Mr. Beruschi was not the only one kept in the dark though. Boss only first advised its shareholders of the necessity of delivering the B Claims in a news release in May 2012 - A FULL SEVEN MONTHS AFTER THE SETTLEMENT.”
There’s more, as there always is in such disputes, which can be found here
Boss, in response, says “Beruschi is the problem – not the solution.” In fact, they said those words in the title of their most recent news release
“"What Beruschi did not say in his circular is especially telling,” said the circular. “For example he was silent on the management of Boss Power under his nominees. Is this because he intends to be named President and CEO, as he was at Goldbank Mining Corp.? That is troubling because Beruschi extracted millions of dollars in compensation from Goldbank even as the shares lost 99.9% of their value under his 18-year leadership. Beruschi must be stopped before he does the same to Boss Power."
“As outlined in Boss Power's Management Information Circular, these monetary issues with Beruschi amount to many millions of dollars and include royalty compensation of $2.5 million that he has demanded for unproduced uranium. Beruschi's dissident circular is silent on nearly all of these issues. That's because he hopes that he can soon negotiate them privately with his nominees, to his benefit.
“Moreover, if Beruschi and his nominees win they will have control of some $30 million from the pending settlement with the Province of British Columbia. Shareholders face the risk that a Board nominated by Beruschi will spend a significant portion of those funds for the benefit of Beruschi and not for the benefit of all shareholders.”
Boss formally offered Beruschi $1.55 million
from the settlement proceeds to settle up on September 23, 2013, basing that amount on an independent valuation made by Roscoe Postle Associates Inc. A second option, submitting to binding arbitration, was also offered.
Boss CEO Ron Netolitzky stated, "We have tried to make things very simple for Mr. Beruschi, he can accept our offer of $1.55 million or he can have an arbitrator determine the value of the B Claims. Either way, he will be paid fairly for the B Claims and Boss will be able to proceed with the Settlement with the Province. It is now over to Mr. Beruschi to decide whether he is going to continue to obstruct the Settlement with the Province."
Beruschi responded by demanding that any settlement must include the resignation of a majority of Boss Power’s directors, to be replaced with independent directors.
Boss’ board responded by announcing they would step down, to be replaced with a new slate of nominees, and accusing Beruschi of paying brokers to deliver proxies.
The Boss board is asking shareholders to vote the Yellow Proxy in support of their nominees.