Friday, October 24, 1997
Bre-X lawyers battle over who can get best
deal for shareholders
By PAUL BAGNELL
Mining Reporter The Financial Post
Public sniping has broken out between the two lead lawyers seeking to sue Bre-X Minerals Ltd. on
behalf of thousands of investors who suffered losses in the Busang gold scam.
The lawyers are fighting over which side of the Canada-U.S. border offers Canadian Bre-X
shareholders the better chance at a large award.
Bre-X, along with several brokerages and mineral consultants, is in the cross-hairs of Canadian and
U.S. lawyers seeking to win back some of the losses suffered by shareholders. The suits are
expected to be among the biggest class actions ever seen in either country.
Paul Yetter, the Houston-based lawyer leading a class action suit in the U.S., said Canadian
shareholders risk settling for "pennies on the dollar" if they accept a made-in-Canada settlement.
As evidence, he points to an affidavit sworn by Harvey Strosberg, the lawyer
leading a Canadian lawsuit against Bre-X and other Busang players, in which
Strosberg says the remedies available to injured shareholders in Ontario
courts are "for all practical purposes, illusory."
Strosberg swore the affidavit in February, in connection with an unrelated legal proceeding in New
Jersey.
Canadian law, Yetter said yesterday, presents shareholders in a class action suit with a series of
ever-taller hurdles before a trial - or an award - is reached.
In reply to Yetter, Strosberg said he's certain the Texas court where Yetter has filed his action will
ultimately have no jurisdiction over Canadian shareholders.
"I'd bet the farm on it," he said in an interview.
However, that is a view not all experts share.
Strosberg also said his U.S. critics are misrepresenting the views he expressed in the February
affidavit.
In the 23-page document, Strosberg says unhappy U.S. shareholders in an action against
Ottawa-based Gandalf Technologies Inc. would be ill-served if their suit is tried in Ontario.
"In my opinion, it is highly improbable that the individuals who were directors and officers would be
found liable for damages for negligent misrepresentation," he says.
Strosberg said his views in the affidavit deal with legal proceedings in which unintentional
misrepresentation is alleged.
"Bre-X is altogether different. Bre-X is a fraud at its heart," Strosberg said.
Canada and the U.S. offer virtually identical civil law climates for cases in which "fraud, dishonesty
and deceit" are alleged on behalf of shareholders, Strosberg said.
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