RECONSIDERATION MOTION FILED; MORE HEARINGS
HELD; TRIAL DATE EXPECTED
The pace of the Bre-X/Bresea shareholder litigation has
quickened. Within the past month, the Court has held one hearing
on a key defense argument and scheduled a second hearing that
will, among other matters, establish a trial date. The Court also
now has before it a written request from Lead Counsel that the
Court reconsider a previous ruling that dismissed most
Canadian plaintiffs from the case.
On February 5, Lead Counsel asked that the Court reconsider its
earlier ruling that the Court lacks jurisdiction over the claims of
Canadian shareholders. According to the request, the Court's
decision on January 8 did not consider important evidence
showing that Canadian shareholders directly relied on
misstatements made in the U.S. when buying their Bre-X stock.
In its decision, the Court indicated that no such evidence existed.
"I believe our motion for reconsideration is persuasive and
well-reasoned," said Lead Counsel Lee Godfrey. "Hopefully, the
Court now sees that there is evidence in the record of
misstatements from the U.S. impacting Canadian shareholders."
A copy of the motion for reconsideration is available on this web
site under the link marked "pleadings."
Several defendants have filed responses opposing the motion. A
ruling from the Court is expected in the near future.
On February 12, the Court heard oral argument on the personal
jurisdiction defenses of defendants Bresea, Kilborn Engineering,
SNC-Lavalin, PT Kilborn Pakar Rekayasa, Paul Kavanagh, John
Thorpe, Hugh Lyons, Rolando Francisco, Stephen McAnulty,
Jeannette Walsh, and the Estate of David Walsh. Each
defendant claimed either that they cannot be legally sued in the
U.S. or that Texas is not a fair forum.
Lead Counsel Paul Yetter responded to these arguments on
behalf of the shareholder class. Yetter argued that those
defendants who were directors and/or officers of Bre-X -- the
Walshes, McAnulty, Francisco, Lyons, Thorpe, and Kavanagh --
exercised considerable control over Bre-X's activities and were
also responsible for misstatements that influenced the U.S.
investing public. Yetter also argued that defendant Bresea, who
owned 23% of Bre-X's common stock, exercised significant
control over Bre-X through overlapping board members. Finally,
Yetter urged the Court to reject the defendants' fairness
arguments, citing both prevailing authority allowing personal
jurisdiction in similar situations and the fact that many of the
defendants have extensive contacts throughout the U.S.
The Court indicated that a ruling on personal jurisdiction
defenses would be issued in the coming weeks.
Shortly after the hearing, the Court notified the parties that a
management conference would be held on March 23. The
purpose of the management conference is to determine the
future scheduling of the case, including setting firm dates for
completing discovery, for filing various motions, and for trial. All
parties are required to be represented at the conference.
The case will develop rapidly after the management conference,
observed Yetter. "I think we will be preparing to be ready for trial
by early next year. We will ask Judge Folsom for a trial date
within 12 months," he said.
Yetter and Godfrey anticipate taking a significant amount of
discovery from the defendants. "Our discovery will be intended to
establish what our clients have wanted to know since the spring
of 1997," said Godfrey. "Who knew what, and when?" |
