Medinah sued by Godwin over debt, property transfer
Medinah Minerals Inc (U:MDMN)
Shares Issued 249,475,716
Wednesday March 05 2008 - Street Wire
by Mike Caswell
North Vancouver promoter Les Price and his company, Medinah Minerals Inc., are being sued for $890,570 in unpaid debts, including one owing to a dead geologist. The lawsuit also claims that Medinah fraudulently conveyed its only significant asset, a property in Chile, to its president, Juan Quijano.
The suit was filed in B.C. Supreme Court on Feb. 21, 2008, by its once faithful supporter, Vancouver businessman Russell Godwin, and his company, RGM Communications Inc. He is claiming that the company owes money to himself and to the estate of Gordon House, a geologist who died on May 22, 2005. Mr. Godwin's suit states that on Oct. 4, 2006, he "took an assignment of the House Debt on behalf of the Estate of House."
Both men are former directors of Medinah. Mr. House did geological consulting work for the company and Mr. Godwin provided corporate communications services personally and through his company, RGM Communications Inc.
In the suit, Mr. Godwin says he and Mr. House submitted regular invoices to Medinah, but the company did not pay them. As of Feb. 1, 2008, Medinah owed Mr. House $147,565, and Mr. Godwin and RGM $743,003.
The fraudulent property transfer allegations centre around a 2004 deal between Medinah and its president, Mr. Quijano. The deal came after a shareholders meeting in May, 2004, in which Mr. Godwin and Mr. House ceased to be directors of Medinah. Mr. Quijano took over as president.
Three months later, the company fraudulently transferred its Alto de Lipangue copper-gold property in Chile to Mr. Quijano, the lawsuit complains. In exchange, Mr. Quijano cancelled convertible preferred shares he held.
Mr. Godwin alleges that the transfer was fraudulent because it preferred the debt of Mr. Quijano to that of the company's other creditors. Mr. Price and Mr. Quijano also conspired to hinder other creditors, he complains.
Mr. Godwin is seeking $890,570, an order setting aside the property transfer, plus general and special damages.
The suit names as defendants Medinah, Mr. Price and Mr. Quijano. Mr. Godwin is represented by Thomas Keast of Watson Goepel Maledy LLP.
Disagreement at Medinah's 2004 AGM
According to a news release Medinah issued on July 27, 2004, the company did not re-elect Mr. House and Mr. Godwin as directors after a disagreement at the company's AGM. The specifics of the argument are not clear. Both men were nominated for board positions, but Mr. Price said he "refused to work any longer with the current Board." Mr. Quijano also took issue with the board, and only agreed to stand for re-election if it changed.
At the meeting, shareholders discussed the refusal by the board to deal with debts and the company's trouble raising money for Alto de Lipangue. In the end, Mr. House and Mr. Godwin were not re-elected, and the company constituted a board that included Mr. Price and Mr. Quijano.
The company said its creditors, who were also present at the meeting, agreed not to start any litigation to collect debts before July 15, 2004. The only exception was Mr. Godwin, who only agreed after some convincing by shareholders.
After the meeting, Medinah sold the Alto de Lipangue property to Mr. Quijano, with the company retaining a 10-per-cent interest. As part of the deal, Mr. Quijano assumed the company's debts in Chile and cancelled his preferred shares. Since then, Medinah and Mr. Quijano have been negotiating a joint venture in Chile.
Obtaining complete information on Medinah is difficult, because it does not publish news releases and it trades on the pink sheets, where regulatory filings are scarce.
The stock closed Tuesday at 2.05 cents, down 15-100ths of a cent.
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