FP Home
FP Reports
Money News
Technology News
Columnists
Markets Snapshot
World Watch
Mutual Fund News
Look up ticker symbol
For Thursday, February 04, 1999
Solv-Ex wins early round in
legal fight
Ruling on venue
By SANDRA RUBIN
The Financial Post
Solv-Ex Corp. won an early round legal victory with a
decision by a U.S. federal court judge that it can pursue
those it says ruined its business with a suit filed in New
Mexico instead of in New York.
The fight to control venue was the first tangle in what's
shaping up as a scrappy court battle over the tactics of
short sellers and the actions of one of the world's largest
banks.
Solv-Ex, an Albuquerque, N.M., firm that says it
developed a better way to extract bitumen from the Alberta
tar sands, is suing seven U.S. short sellers, giant Deutsche
Bank AG and Weir-Jones Engineering Consultants Ltd., a
Vancouver-based engineering firm.
Two groups of short sellers and Weir-Jones went before a
New York judge last week, asking that Solv-Ex be forced
to try the case in New York.
In a heated session, they argued that the New Mexico
complaint, filed in December, was really just the
continuation of a 1996 New York suit -- one the company
itself asked to have dismissed for lack of funds.
They told the judge that Solv-Ex promised to resume
proceedings in New York if it ever wanted to take up the
case again, and said the new filing was "at its heart, just a
question of trial tactics" by lawyers.
"They filed this convoluted piece of litigation in New
Mexico, for whatever reason, then used it to get around an
order of a U.S. Federal Court," said Lawrence Hoyle,
representing one group of short sellers and Weir-Jones.
Solv-Ex lawyer Paul Yetter said the New Mexico suit has
16 new defendants and a new plaintiff, and criticized the
short sellers' position. "I have no doubt they would prefer to
be here in New York -- their home town. Hotels in New
York, air fares and other necessities of life are very
expensive in New York compared with New Mexico."
In a decision delivered by conference call late Friday
afternoon, the judge ruled that the company can forge
ahead in New Mexico, but stated that all his rulings in the
prior case will apply to the new suit.
Mr. Yetter couldn't be reached yesterday but Mr. Hoyle
said he has not yet seen the written ruling, so it's premature
to discuss whether they plan to appeal.
Solv-Ex says the short sellers went to the company
pretending to be potential investors, then misused
confidential information to issue "reports" that the
technology wouldn't work. Short sellers profit when a stock
price falls. A fund manager at Deutsche Bank was secretly
trying to corner the market in shares to cover unauthorized
losses.
Top Stories
Rogers Cantel loses $78.6 million in '98 Rogers Cantel
loses big in '98
Although company insiders predict a rosy future, Rogers
Cantel said it posted a loss of $33.2 million for the fourth
quarter of 1998, bringing the total loss on the year to $78.6
million. In Money News
Cominco loses on low prices
Mining firm Cominco Ltd. said a net loss of $12 million in
the fourth quarter was due to property writedowns forced
by low demand for nickel and other metals. In Money News
More than 5,000 register with Bre-X
trustee
More than 5,000 people have registered with the
bankruptcy trustee for Bre-X Minerals Ltd., all claiming to
have lost money and all clamouring for a share of what little
Bre-X has left. In Money News
JetForm sees Q3 loss
JetForm Corp., an electronic business form leader, said that
its third quarter results are disappointing to the company
and will no doubt disappoint investors and analysts. In
Money News
CANOE home | We welcome your feedback.
Copyright © 1999, Canoe Limited Partnership.
All rights reserved. Please click here for full copyright terms and restrictions.
|
