Tuesday, May 5, 1998
Bre-X assets frozen
CALGARY (CP) - The assets of David Walsh, the former head of Bre-X Minerals Ltd., and his
wife Jeanette are frozen until the courts settle outstanding lawsuits, the company's trustee announced.
"We've done it!," said Ross Nelson of Deloitte and Touche, the bankruptcy trustee of the mineral
company.
"The assets are frozen to recover funds and to reimburse creditors of Bre-X."
But the thousands of shareholders who want their money back from the Indonesia gold mining fraud
first have to prove to courts they are creditors of the failed company, Nelson said.
The successful summons, filed in the Supreme Court of the Commonwealth of the Bahamas,
claimed that Bre-X suffered damages as a result of David Walsh's breach of duty and his negligence
while head of the company.
Harvey Strosberg, who represents more than 1,000 Bre-X investors, is delighted his clients may
recoup some of their losses from the couple's assets.
"I think it's really fitting," Strosberg said, pointing out Monday was the one-year anniversary of a
report confirming the Busang site was a massive fraud.
"I think the symmetry is exquisite," he added.
Bre-X's share price collapsed last year, wiping out more than $3-billion in investments. The
company is now bankrupt and investors have filed a series of class actions in Canada and the United
States to try to recover their losses.
Strosberg's Ontario class action is the first Bre-X lawsuit to get to court. The suit alleges that Bre-X
analysts and insiders knowingly misled investors about the company for personal gain.
Last fall, the Walshes took their bank, Ansbacher Bahamas, to court and finally succeeded in
withdrawing their money from bank accounts that once held $25.3 million.
Nelson said Bre-X shareholders looking to be classified as a creditor should register with Deloitte
and Touche.
It isn't yet known exactly how much the Walshes own, but the summons requires the couple to
disclose all of their assets, Nelson said.
It took Deloitte and Touche months to put together a 15-centimetre-thick affidavit for the Bahamas
court.
"I think it's significant when you have a Canadian-based bankruptcy with worldwide implications,
and we are able to go offshore and freeze people's assets," Nelson said.
The assets of John Felderhof, Bre-X's former vice-chairman and senior geologist, were frozen by
Deloitte and Touche last December.
The Walshes moved to the Bahamas two years ago, while Felderhof lives in the Cayman Islands.
So far, some 5,500 Bre-X investors have registered with Deloitte and Touche. There could be as
many as 40,000 Canadians who lost money on Bre-X shares, Nelson said.
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