RE: CHRISTOPHER BYRON->Imagis restitches Red Herring suit
2002-10-11 17:22 PT - Street Wire
GALLING BEHAVIOUR
by Lee M. Webb
Imagis Technologies Inc. has filed an amended statement of claim in its libel suit against U.S.-based Red Herring Communications Inc. and veteran journalist Christopher Byron over an unflattering article. Representing Imagis, Howard Shapray of Shapray Cramer & Associates filed the original statement of claim against Red Herring and Mr. Byron in the Supreme Court of British Columbia on Sept. 10. Mr. Shapray added further allegations regarding Red Herring's actions in an amendment filed on Sept. 27.
According to the allegations in the Sept. 10 statement of claim, Mr. Byron maliciously defamed Imagis, including its management and directors, in an article first published on the Internet by Red Herring on Aug. 5. As Imagis claims, the allegedly libelous article was subsequently republished in the September print edition of Red Herring magazine. Canada Stockwatch provided details of the original statement of claim in a Sept. 13 article.
The original statement of claim has now been augmented with some new allegations. Not only did Red Herring publish the allegedly defamatory article twice, it subsequently claimed that it was standing behind Mr. Byron's story, Imagis now alleges. Apparently Imagis and Mr. Shapray consider this behaviour galling, or at least actionable.
"After the publication of the Article in Red Herring magazine, on or about September 10, 2002, Red Herring's editor sent an email to national news media circulating throughout Canada referring to the article, which stated inter alia that Red Herring was sticking to its story and that 'Byron's column on Imagis Technologies is accurate fair and balanced' (the 'Statement')," Imagis alleges. "The Statement was, in conjunction with the Article to which it referred, false and defamatory of Imagis."
According to the amended statement of claim, Red Herring's statement was published in the National Post. On Sept. 13, Stockwatch also reported that Red Herring stood behind the article. "We stand behind the story," Blaise Zerega, Red Herring's editor, told Stockwatch. "It is fully accurate and it is part of our tradition of insightful, groundbreaking journalism."
In addition to stating that it was standing behind Mr. Byron's story, Imagis claims that Red Herring further defamed the company in a second article. "Further on September 13, 2001 Red Herring posted on the Red Herring website a further article (the 'Second Article') that referred to the Article," Imagis alleges in its amended statement of claim. "The words of the Second Article were false and defamatory of Imagis in that it attempted to justify the defamatory innuendos and imputations of the Article as true and accurate. The defamatory words of the Second Article were read by persons in British Columbia and republished and further circulated throughout Canada and the world.
"The publication and republication of the Statement and the Second Article further exacerbated the injury to Imagis caused by the Article." Imagis claims that the statement and the second article "were maliciously published with an intent to further injure Imagis."
In addition to stitching in a few more allegations in the amended statement of claim, Mr. Shapray retailored some of the allegations that appeared in the original statement of claim. For example, the Vancouver lawyer tidied up some of the spelling. As pointed out by Stockwatch in a Sept. 13 article, the name of the plaintiff was rendered as "Images" in one instance in the original statement of claim. That little slip has been corrected in the amended statement of claim.
A claim involving MSNBC, which also published Mr. Byron's article, has been more extensively refashioned. "Despite the warnings and presentation of factual information to refute the false claims, Red Herring refused to publish any retraction or to remove the Article from Red Herring's website, although MSNBC did so forthwith," the original statement of claim alleged. The amended statement of claim removes the ambiguity of that allegation, which might be taken to mean that MSNBC removed the article from Red Herring's Web site, by clarifying that MSNBC allegedly removed "the article from its servers and website forthwith."
While the ambiguity of the allegation involving MSNBC has been removed, it remains at odds with MSNBC's claims regarding the allegedly defamatory article. According to MSNBC, Mr. Byron's article was not removed as a result of any information, factual or otherwise, provided by Imagis. In an Aug. 15 letter, MSNBC unequivocally advised Imagis that the article had been removed as part of MSNBC's normal administrative procedures. MSNBC's lawyer, Kraig Baker, was no less direct when contacted by Stockwatch. "This article would have come down whether Imagis had sent the letter or not," Mr. Baker said.
Perhaps in the most interesting bit of legal tailoring, Mr. Shapray took the scissors to an allegation involving Imagis director Treyton Thomas. Mr. Thomas is the chairman and founder of the Pembridge Group, an obscure Boston-based alternative asset management firm. On March 6, Pembridge issued a news release that was widely misinterpreted and misreported as a $90-million (U.S.) buyout offer for Imagis. Imagis's share price rocketed to a 52-week high of $5.66 in the wake of the misinterpreted news release that was issued just as the trading restrictions on millions of Imagis shares were expiring. Mr. Thomas was appointed to Imagis's board of directors on July 9.
Imagis took considerable exception to Mr. Byron's alleged defamatory words and imputations regarding Mr. Thomas. According to the original statement of claim, Mr. Byron's words meant that "the directors of Imagis did not perform reasonable due diligence on Treyton Thomas ('Thomas'), an advisor and director of Imagis, before entering into an advisory agreement and offering him membership on Imagis' board because Thomas was, as alleged in the Article, a mysterious, unreliable, unsuccessful person who had been unable to hold steady employment, who did not pay his liabilities, and who ran a fly-by-night operation that may not exist at all."
In the amended statement of claim, Mr. Shapray excised much of what Mr. Byron allegedly meant to say about Mr. Thomas in his article. Specifically, Mr. Shapray removed the words "because Thomas was, as alleged in the Article, a mysterious, unreliable, unsuccessful person who had been unable to hold steady employment, who did not pay his liabilities and who ran a fly-by-night operation that may not exist at all."
It is not clear whether this peculiar piece of legal tailoring is a tacit acknowledgement that Mr. Thomas may be "a mysterious, unreliable, unsuccessful person who had been unable to hold steady employment, who did not pay his liabilities, and who ran a fly-by-night operation that may not exist at all," or whether Mr. Shapray determined that he might have some difficulty advancing that particular allegation, or whether all that prose was removed for some other reason entirely.
While Imagis is evidently galled by Red Herring's very public refusal to abandon its support for Mr. Byron's article, some shareholders, particularly those who piled into the stock at much higher levels, may be no less galled at the company's stock price and the spotty trading. No shares changed hands at all on the TSX Venture Exchange on Oct. 9 and only 1,100 shares traded on Oct. 10. On a volume of 24,350 shares on Oct. 11, Imagis closed out the week at $1.16.
Comments regarding this article may be sent to lwebb@stockwatch.com.
(More information regarding Imagis Technologies is available in Canada Stockwatch articles published on March 7, 11, 15, 25, 27 and 28; April 2, 9 and 16; May 17, 23 and 30; June 4, 11, 18, 26 and 28; July 3, 12 and 18; Sept. 12, 13, 16, 20, 23, 24 and 27; and Oct. 2 and 9, 2002.) |
