Re: 10/01 - [TVS.V] Stockwatch: Technovision files a defamation and muzzle suit against its COO, major shareholder, and others
Gordon Tremain's Technovision Systems has filed a broad defamation and muzzle suit against its chief operating officer Ross Jepson, director and major shareholder Diane Urquhart, and a number of other defendants, claiming their allegedly unfounded complaints to the Canadian Venture Exchange, the Canada Customs and Revenue Agency, auditors KPMG and lead creditor Royal Bank of Canada have led to a series of investigations and resulted in Royal Bank refusing further financing.
In a statement of claim filed Thursday in the Supreme Court of British Columbia, Technovision seeks assorted injunctions to gag its detractors, various damages and a declaration that the complaints to the CDNX and the tax agency, formerly known as Revenue Canada, are an abuse of process. Technovision also seeks court declarations that Ms. Urquhart and Mr. Ross are unfit to act as director and chief operating officer, respectively. The allegations in the suit, filed by Vancouver lawyer Wade Simpson, an independent, have not yet been proven in court and no statements of defence have yet been filed. The named plaintiffs are Technovision and iTCanada.com
Inc., its main operating subsidiary.
Shares of Technovision have fallen from a 52-week high of $1.60, set last October, to bottom out at 32 cents last week. The stock rose four cents to 39 cents shortly before the close on Friday. Technovision shares peaked at $2.25 in March, 2000.
The named individual defendants include Ms. Urquhart and her husband Hugh Urquhart, both of Mississauga, Ont., Mr. Jepson, of Oakville, Ont., Diane M. Aldrich, of Eden Prairie, Minn., Reed Sumida of Victoria and Graham Fletcher of Edmonton. The corporate defendants include three companies allegedly controlled by Ms. Aldirich: Golden Triangle On Line Inc., of Kitchener, Ont., WEDJ Canada Ltd., of Waterloo, Ont., and WEDJ Holdings Ltd., of Reno, Nev.
The suit claims the defendants have attempted to take control of Technovision through a purported campaign of slander, intentional interference with economic relations, abuse of process, self dealing and "intimidation." Technovision claims Ms. Urquhart and Mr. Jepson have breached their fiduciary duties to the company.
Lawyer Mr. Simpson claims the defendants contacted Royal Bank, Technovision's largest creditor, and falsely accused the company of being mismanaged and an unfit debtor, and contacted the CDNX and launched "unfounded" complaints about the directors and management of the company and the conduct of its business.
The suit also claims the group contacted Technovision suppliers, employees and auditors KPMG, falsely claiming the company is mismanaged, and contacted Telus, Technovision's largest supplier of telephone and Internet access, asking it to finance a takeover of the company. In addition, the defendants allegedly badmouthed Technovision to potential takeover targets and convinced the owners of these companies to breach their agreements. Technovision further claims the group contacted the federal tax agency, complaining about the company and its management, and revealing the company's confidential information to the tax man. The defendants also allegedly threatened an unidentified Technovision director with complaints to the RCMP and threatened unidentified employees and directors of the company with complaints to professional associations. In addition, at least one of the defendants allegedly contacted P. Charles Cochrane, a competitor of Technovision who is currently suing two Technovision directors, and discussed confidential company information.
The suit claims that as a result of this broad campaign, Technovision has spent time and resources dealing with the CDNX and Canada Customs and Revenue Agency investigations. Lawyer Mr. Simpson reveals the CCRA investigations are continuing. In addition, Technovision claims its reputation and that of its directors has been damaged. Further, based on this allegedly unfounded series of complaints, Royal Bank has refused financing, and Technovision has been unable to purchase companies that it would generate profits from.
Technovision singles out Ms. Urquhart and Mr. Jepson for special mention, claiming they had a personal undisclosed interest in the "group of defendants" that was attempting to take over the company. Although this group is not specifically identified, it is presumably the Aldrich companies. The suit also claims that while the pair were directors of iTCanada, they breached their fiduciary duties by paying $600,000 of iTCanada's money to Ms. Aldrich's Golden Triangle for an allegedly "worthless" option.
Technovision seeks a lengthy list of court orders, declarations and damages against the defendants, led by an injunction muzzling any of the defendants from saying anything about the company, its business or employees to any creditors, accountants, employees or suppliers.
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