OT: B.C. Securities Commission - Street Wire
BCSC target Eron's West Coast Golf in $5.81-million suit
B.C. Securities Commission *BCSC
Tuesday December 24 2002 Street Wire
Also Antigua Enterprises Inc (ANE) Street Wire
by Brent Mudry
Vancouver law firm Alexander Holburn Beaudin & Lang is a secondary defendant in a $5.81-million suit from more than 65 investors who bought shares in Antigua Enterprises in a 1997 financing through West Coast Golf Promotions Ltd., an affiliate of Brian Slobogian and Frank Biller's fraudulent Eron Mortgage promotion.
In a statement of claim filed Dec. 19 in the Supreme Court of British Columbia, the investors seek judgment of $5.81-million against insolvent West Coast Golf and various court orders and declarations against co-defendants Alexander Holburn, David Craig, a former director of West Coast Golf and officer of Antigua, and Quesnel, B.C., businessman Lorne Martindale, doing business as Martindale Capital. The allegations in the suit, filed by Vancouver lawyer Dennis Fitzpatrick of Burns Fitzpatrick Rogers & Schwartz, have not yet been proven in court and no statements of defence have yet been filed.
The suit traces back to mid-1997, when the Eron group investors were major investors in Antigua, and Eron head Mr. Slobogian joined Antigua's board. The financing coincided with the name change of Antigua from Southampton Ventures, with a 5:1 share consolidation. The investors initially loaned the funds to West Coast Golf. "The loans were made in accordance with documents prepared for and on behalf of the defendant by Eron Mortgage Corp. Interest accrues on the loans at the rate of 24 per cent per annum," states the suit.
The suit notes that as a condition of making the loans, West Coast Golf offered the investors security and advances through four parts. The first part was a $4.2-million convertible debenture of Southampton, with interest at 15 per cent per year, convertible at 80 cents a share. The second part was a block of 780,000 units of Southampton in a private placement at 90 cents. The third part was a $400,000 (U.S.) promissory note issued by Southampton. The final part was a pledge of two million shares of Southampton owned by company principals Louis Lloyd and Steven Haynes.
In a hypothecation agreement dated Aug. 29, 1997, West Coast agreed to deliver the securitiesto Alexander Holburn as continuing collateral security. The suit notes that after share conversions, four share certificates were issued by Antigua: for 1.14 million shares, 211,000 shares, 152,000 shares and 177,000 shares.
The suit claims that written demand was made March 6, 2001, to West Coast Golf for immediate repayment of $5.81-million, plus interest dating back to 1998, but no payment has yet been made. The suit claims written demand was also made the same day to Mr. Craig and Alexander Holburn for delivery of the share certificates, and the first two certificates were finally delivered by Mr. Craig on Oct. 2 of this year.
The suit seeks a declaration that the plaintiffs hold a security interest over all the shares, an order that any shares and trust fund held by Mr. Craig and Alexander Holburn be delivered, and various other orders. In addition, the suit seeks judgment of $5.81-million against West Coast Golf and the appointment of a receiver for the company.
bmudry@stockwatch.com
stockwatch.com |
