Finally some news to explain the recent price action.
MONTREAL, Jan. 27 /PRNewswire/ -- The new management of the Company has taken legal action after extensive investigations into apparent irregularities from previous management operations.
On November 17, 1998 in the United States District Court of Jackson Mississippi, Forestry International (BB: FYNI) filed a
$35,000,000 civil action against Mr. Randy Pope, President of Dixieland Forest Products, Inc. for breach of contract, breach of duty of good faith and fair dealing including wrongful foreclosure. Forestry is seeking restitution in equity as well as compensatory and punitive damages as a result of the Defendant's actions. By this action, Forestry intends to redress the losses incurred by the loss of control of Dixieland Forest Products.
Also, the Company filed in Tucson Arizona Superior Court a
Declaratory Judgement action against several individuals and entities claiming benefits under a Promissory Note on the basis that Forestry International never received consideration for the Note. To that effect, when new management took over the operations of Forestry International, Dylan-Hutton an entity that was related to the former Officers and Directors of the Company, filed federal bankruptcy under Chapter 7. Negotiations with the Trustee appointed for the liquidation of Dylan-Hutton holdings is ongoing, and Forestry believes that
the ultimate result will be that the Court will declare the debt invalid
and allow the Company to remove the indebtedness from the Balance Sheet.
Relating to previous management, the Company filed a counterclaim against Mr. David Shorey, former President of Forestry International, based on the alleged conversion of Company property to his own use and a second claim contending a breach of fiduciary duty as an officer and director of Forestry. The latter claim stipulates that Mr. Shorey substituted a promissory note to allow the conversion of that debt into a recourse debt convertible into Forestry common shares without any consideration to the Company.
Forestry is presently negotiating the final terms of the acquisition
of a fully integrated timber company.
For more information, please contact Louis R. Turp, CEO (514)
495-7747. |
