EWS RELEASE TRANSMITTED BY CANADIAN CORPORATE NEWS
FOR: PACIFIC RIM MINING CORP.
SEC FILE: 029704
VSE, TSE SYMBOL: PFG
NOVEMBER 20, 1998
Pacific Rim Mining Legal Action Review
VANCOUVER, BRITISH COLUMBIA--Management of Pacific Rim Mining
Corp. has become aware of a potential liability involving the
Company arising out of a lawsuit commenced in early 1997 by Gerald
Phillips, a former president and director of the Company (the
"Action"). Phillips commenced the Action in his own name and in
the name of the Company against one Marian Plucinski. In the
lawsuit, Phillips sought an accounting of various loans from
Plucinski and a return of 275,000 shares (the "Shares") given by
Phillips to Plucinski as collateral for the loans. The Board of
Directors of the Company did not authorize Phillips to commence
the Action in the name of the Company.
During the course of the litigation, Phillips sought an injunction
to restrain Plucinski from disposing of the Shares Phillips claims
are his. In support of the injunction application, Phillips gave
an undertaking compensating Plucinski (and related parties) for
any damages they may suffer as a result of the injunction.
Phillips did not have the authority of the Board of Directors to
give this undertaking on behalf of the Company and present
management was not aware of it until recently.
Management has received advice that it is not possible, at the
present time, to accurately assess the potential for liability or
the extent of damages which could arise from the undertaking, but
that the maximum potential exposure is approximately $2 million.
Phillips has agreed to indemnify the Company for any loss the
Company may suffer as a result of the Action, including any
damages as a result of the undertaking and all of the Company's
legal costs.
The Company and its counsel are continuing to investigate this
matter and to consider the Company's options with respect to the
litigation and any ancillary matters that may arise. The Company
will take whatever steps it considers appropriate to protect its
interests and the interests of its shareholders.
On behalf of the board of directors,
Catherine McLeod-Seltzer, President
This news release contains forward-looking statements regarding
legal proceedings and strategies, and potential corporate
liability. Forward-looking statements address future events and
conditions and therefore involve inherent risks and uncertainties.
Actual results may differ materially from those currently
anticipated in such statements.
|
