Saturday, January 31, 1998
Nesbitt motion on Bre-X suit 'audacious,'
says lawyer
By SANDRA RUBIN
The Financial Post
Motions by Nesbitt Burns Inc. and others to have a Bre-X Minerals Ltd. class action suit against them
thrown out on questions of law are "remarkably audacious," according to a court filing Friday.
The blockbuster U.S. class action is planning to include any Canadian investors wishing to take part.
A certification hearing will be held in Texas on Feb. 13.
In the latest filing, lead lawyer Paul Yetter writes a scathing indictment of Nesbitt's motion to have the
case dismissed on grounds it did nothing wrong. "Nesbitt cannot accept the
reality of the situation," he says. "It insists its extraordinary lapses must be
excused. It says it's blameless because 'no one else was able to' uncover the
fraud; all it did was 'not discover what nobody else discovered.'
"Of course, that is untrue. The Bre-X fraud was discovered, easily, by Freeport-[McMoRan Copper
& Gold Inc.] and Strathcona [Minerals Services]. Uncorrupted by the hype surrounding Bre-X and
Bresea, they saw the amateurish fraud immediately, once they reviewed information that had long been
known by the [principals], but not the investing public. Unfortunately, they came on the scene too late
to warn the thousands of class members who lost billions in the worthless stock."
Yetter also filed arguments on the Canada-U.S. question, including a legal opinion from retired
Ontario Appeals Court judge Lloyd Houlden, who says any judgment in Texas would be enforceable
under Canadian law.
"It is clear under Canadian law that a Canadian litigant in the Texas litigation who submitted ... to the
jurisdiction of the Texas courts would be bound in Canada by a Texas judgment," said Houlden, who
presided over some of Canada's biggest restructurings and bankruptcies.
"It is also clear that such a Texas judgment for a definite sum of money ... would be enforceable in
Canada." Yetter also attacks Nesbitt's motives in asking the case be dismissed on the grounds it's a
Canadian firm, and the Texas court is the wrong jurisdiction.
He says Nesbitt is a "worldwide stock brokerage and investment banking firm, with offices in Texas."
"Nesbitt's concern is not convenience," he says. "Like its co-defendants, Nesbitt's fervent wish is to
avoid responsibility under U.S. securities laws ... in effect, to deny victimized investors meaningful
remedies." |
