Law suit item note A statement of defense has not yet been filed.
Arrowhead Minerals Corp -
Arrowhead fires suit at ex-president
Arrowhead Minerals Corp AOW
Shares issued 25,308,505 1999-09-14 close $0.11
Tuesday Sep 14 1999
by Brent Mudry
Arrowhead Minerals has filed suit against its former president Allan Laird over a contentious farmout agreement he negotiated last month. In a statement of claim filed Monday in the Supreme Court of British Columbia, Arrowhead claims the Calgary-based mining engineer was in a conflict of interest and breached his duty of disclosure. The suit notes the dispute pits Arrowhead and current directors Mark Jarvis, Bruce Campbell and John Hislop against Mr. Laird, former director Marc Bruner and Mark Erickson.
Arrowhead lawyer Barry Fraser of McCarthy Tetrault claims that Mr. Laird, in breach of his duties to Arrowhead, provided confidential information on the company's financial affairs to Pinedale Partners LLC and Warbonnet Partners LLC, which are controlled by Mr. Bruner and Mr. Erickson. The suit notes that Mr. Laird, appointed president on Jan. 28, was removed from the position seven months later, on Aug. 27, in the wake of the contentious August deals.
The dispute traces back to Aug. 9, when Mr. Laird executed a farmout agreement between Arrowhead Minerals subsidiary Arrowhead Resources USA and Pinedale and Warbonnet. The farmout agreement covered all of Arrowhead USA's main assets, including its rights to Ultra Resources' oil and gas leases in Sublette County in Wyoming, and an interest in oil and gas leases on the Madera prospect in Lea County in New Mexico. The suit claims that Mr. Laird signed and executed the farmout deals without the knowledge of Arrowhead's other directors and without authority. Mr. Fraser notes that three days later, on Aug. 12, Mr. Laird met with Arrowhead's board in an ill-fated attempt to gain approval for the deals.
The suit claims that Mr. Laird failed to disclose his interest in the farmout agreement, which served as an inducement to negotiate the deal. Arrowhead admits it does not know the specifics of any such alleged secret interest. On Aug. 20, Arrowhead's board rejected the farmout agreement and subsequently approved a substantially better agreement on Aug. 27. The suit notes that this same day, Arrowhead approved the sale of its Madera interest to its director Mr. Hislop for $200,000 (U.S.), which allegedly represented fair market value for the prospect.
Arrowhead also claims that Mr. Laird helped Mr. Bruner and Mr. Erickson prepare a suit in Wyoming against Arrowhead, Mr. Jarvis and Ultra, and swore a supporting affidavit which Pinedale and Warbonnet used to get a temporary restraining order. The suit also claims that in an effort to coerce other Arrowhead directors, Mr. Laird threatened them with a $12-million (U.S.) damages suit unless they approved the farmout agreements. In addition, Arrowhead claims Mr. Laird disparaged it in Internet statements and telephone calls to brokers. Lawyer Mr. Fraser seeks unspecified damages, including aggravated and punitive damages, claiming the ex-president's conduct has been "malicious, reprehensible, high-handed and scandalous." A statement of defence has not yet been filed.
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