Hi Bill, Mr. Plucinski definitely fits the criteria for the definition of a loan shark. Note the "criminal" rate of interest is anything over 60%. Don't know about, you but I think anything 5% above the prime is criminal. The tax situation in Canada should fit into this criteria as well. After all, they dip into our wallets for more than half of our money. The banks then do the best they can via mortgages etc. to take as much of the residue as possible. This is what the lawsuit is all about:
Early lender sued for $1.92 million block of shares
Pacific Rim Mining Corp
PFG
Shares issued 11,941,610
1997-04-14 close $5
Monday Apr 14 1997
BROKERAGE DRAWN INTO FRAY
by Brent Mudry
The recent surge in Pacific Rim Mining's shares, amid the entry of a group led by
promoter Catherine McLeod, poses a novel headache for the company's
founders, as a former lender now refuses to return a $1.92 million block of stock
held as collateral for high-interest loans. Pacific Rim filed suit against Vancouver
financier Marian Plucinski six weeks ago to retrieve 275,000 shares, and
Canaccord Capital has now been drawn in, claiming on Wednesday that Mr
Plucinski duped it out of 150,000 shares, worth about $1 million, to circumvent a
court freeze order.
Court-filed documents claim that Pacific Rim borrowed $143,500 from Mr
Plucinski, also known as Steve Polson, in early 1996, at interest rates of up to ten
per-cent per month, then later called the hefty interest rate "criminal." While at
least one of Mr Plucinski's loans had an annualized simple interest rate of 120
per-cent, the Criminal Code of Canada, in a bid to curb loan-sharking, deems a
60 per-cent annual rate as the threshold for a "criminal" rate of interest. While the
term "criminal interest" may sound ominous, in reality, this law usually merely
means that such contracts are unenforceable.
The dispute traces back to December 1995, when Pacific Rim began borrowing
funds from Mr Plucinski with an initial $45,000 loan. In a statement of claim filed
six weeks ago in BC Supreme Court, Pacific Rim and founding president Gerald
Phillips claim they extended the short-term loan several times before raising its
deemed value to $78,000 in June 1996. In addition to the $45,000 loan, Pacific
Rim and Mr Phillips borrowed a further $98,500 from Mr Plucinski by June. The
company gave Mr Plucinski unrestricted street-form share certificates for 275,000
shares as collateral for the loans.
The suit claims that Pacific Rim finally had the money to repay Mr Plucinski in
January, but he refused to accept a repayment offer of $225,000, based on 40
per-cent annualized interest. In an court-filed affidavit, Mr Phillips claims that Mr
Plucinski told Pacific Rim director John Chalcraft that he had already sold the
shares, but the financier later retracted this statement. In other affidavits, Mr
Chalcraft and fellow director Druval Westcott claim that Mr Plucinski told them in
February that he demanded $285,000 to repay the loans, plus 50,000 shares,
worth about $350,000, as a "teensy little profit."
With Mr Plucinski refusing to return the 275,000 share block, Pacific Rim and Mr
Phillips filed suit on February 24, and won a court freeze on the shares on March
7. In a statement of defence filed two weeks later, Mr Plucinski claimed that the
loan agreements called for him to keep the shares "absolutely" in the event of a
default, which occured last June. Of the disputed shares, Pacific Rim lays claim to
175,000 and Mr Phillips claims 100,000. Mr Plucinski also revealed in his March
19 defence that he had sold the shares to a "third party," but he offered no further
details.
In a separate suit filed Wednesday, Canaccord claims Mr Plucinski duped it out
of 150,000 Pacific Rim shares by transferring and splitting certificates through an
associate. Canaccord claims that on February 28, Mr Plucinski introduced
Zbigniew Fabiszewski to Cameron Fenn, Mr Plucinski's broker at the firm. A few
days later, on March 3, Mr Fenn opened an account for Mr Fabiszewski.
Canaccord alleges the Fabiszewski account was opened at the instruction of Mr
Plucinski solely for the purpose of transferring and breaking up the disputed share
certificates, in a bid to bypass the court order.
The brokerage firm claims it had no knowledge of the purpose for which Mr
Fabiszewski and Mr Plucinski intended to use the Fabiszewski account for the
"sham" transactions. Canaccord claims it had no prior knowledge of the pair's
alleged scheme, and the brokerage claims it was "unaware of the fraudulent
activities" until March 24, when it discovered the original certificates were not
"good and transferable."
Canaccord's April 9 lawsuit, however, contrasts an affidavit sworn and filed by
Pacific Rim lawyer Frederick Herbert on March 7, the same day the lawyer won
the court freeze. Canaccord claims it opened the Fabiszewski account on March
3 with the deposit of a 100,000 share certificate with a rush split request. Mr
Herbert claims that David Grunder, another Pacific Rim lawyer, warned
Canaccord Capital compliance officer Diane Jackson in a phone call and a letter
on March 6 about the disputed shares. "I telephoned you and advised you that
there is a dispute with respect to the shares and that Canaccord should take steps
to make sure it is not out of pocket," Mr Grunder stated in the letter. The lawyer
specified the certificate numbers and advised Canaccord that he planned to seek a
court freezing order the next day, on March 7.
Despite these contacts, Canaccord delivered endorsed certificates for the first
batch of 100,000 shares to Mr Fabiszewski on March 7. A week later, the
brokerage split another certificate of 50,000 shares for Mr Fabiszewski and
delivered the new certificates to him in street form on March 17. Canaccord now
claims it was unaware of the scheme until March 24, when the clearing houses
refused to honour the original certificates due to the court order. The brokerage
claims it is now on the hook for the 150,000 shares and it has suffered damages,
including a "reduction in capital position and lost business opportunity."
Canaccord's Peter Brown, however, says it is "not a big deal," as a "stop transfer"
was placed on the stock. Mr Brown declined to comment further on the matter. |
