Fri Apr 26, 2013
First Majestic Receives Positive Judgment for US$89.6 in Court Litigation
firstmajestic.com
FIRST MAJESTIC SILVER CORP. (AG: NYSE; FR: TSX) (the "Company" or "First Majestic") is pleased to announce that on April 24, 2013, after a lengthy trial, the Supreme Court of British Columbia ruled in favour of First Majestic with respect to the previously reported litigation against Hector Davila Santos ("Hector Davila") ( not related to the Company's Chief Operating Officer, Ramon Davila) and Minera Arroyo Del Agua, S.A. de C.V. (which subsequently became Minerales y Minas Mexicana, S.A. de C.V.).
In November 2007, the Company and its wholly-owned subsidiary, First Silver Reserve Inc. ("FSR") commenced an action against Hector Davila, the previous director, President & Chief Executive Officer of FSR. The Company alleged, among other things, that while Hector Davila held the positions of director, President and Chief Executive Officer of FSR, he violated his fiduciary duty to FSR and that subsequently, through Minera Arroyo, he acquired the Bolaños Mine from Grupo Mexico ("Grupo") for his own personal interest. FSR became a wholly owned subsidiary of First Majestic in September 2006.
The Honourable Mr. Justice Myers concluded that the Bolaños opportunity belonged to FSR and that Hector Davila did in fact breach his fiduciary duty by acquiring the Bolaños Mine. Mr. Justice Myers calculated in his ruling a net opportunity loss in favour of First Majestic in the amount of US$89.6 million, after reducing an initial amount of US$111 million for the post-acquisition investments of Hector Davila at the Bolaños Mine and applying a 15% reduction contingency. The US$89.6 million judgment does not include pre-judgment interest or legal costs, of which a portion is recoverable, nor has the court ruled on Hector Davila's counterclaim for, among other things, interest charges on the approximately CDN$14.250 million which has been held in Hector Davila's lawyer's trust account since July 2009. These issues, together with other outstanding issues, will be subsequently addressed by Mr. Justice Myers on a date to be scheduled. Under British Columbia law, Hector Davila has 30 days to appeal the April 24, 2013 judgment.
..more
"However, I caution shareholders that, due to the magnitude of this award, we anticipate Hector Davila will appeal this decision and there will be further legal activities in order to realize this award. It is my view that directors and officers of public companies need to be held to the highest ethical and moral standards and should be role models for industry, to assure transparency and honesty for the benefit of all the stakeholders."
$90 million! that is a lot of money. <G> |
