Arizona Star Resource Corp (C-AZS) - Street Wire
Arizona Star's unhappy shareholder to vote at new AGM
2004-12-07 20:34 ET - Street Wire
Shares issued 40,405,937
AZS Close 2004-12-07 C$ 5.81
by Stockwatch Business Reporter
Arizona Star Resource Corp. and its unhappy shareholder, Albert Friedberg's Pan Atlantic Bank and Trust Ltd., have reached an agreement, by consent order, on how the company's contested annual general meeting will be handled.
The Dec. 16, 2004, AGM will be the the second for Arizona Star this year, the first being adjourned after the company's chairman, Roger Richer, disallowed Pan Atlantic's proxy. Pan Atlantic promptly filed a petition in B.C. Supreme Court asking the court to enforce its voting rights at the reconvened AGM. Pan Atlantic also sought an independent chair for the second meeting.
The company and Pan Atlantic have now settled the matter of how the AGM will proceed. They presented a consent order to Madam Justice Kirsti M. Gill of the B.C. Supreme Court on Tuesday, outlining their plans for the contested AGM. (A consent order is similar to a court order, except the terms are agreed upon by the parties ahead of time, instead of being imposed by the court.)
The first AGM
At the original AGM, held on Nov. 3, 2004, Pan Atlantic planned to replace the board of Arizona Star with its own nominees. If Mr. Richer had allowed Pan Atlantic to vote its 12,156,100 Arizona Star shares, it would easily have won. Excluding disallowed proxies, including that of Pan Atlantic, there were only 4.8 million of Arizona Star's 40,405,937 shares represented at the meeting.
Arizona Star's position is that all of the company's shareholders should have a chance to decide the company's future, not just a small minority. Pan Atlantic, meanwhile, says Arizona Star's board is controlled by the company's management company, Bema Gold Corp., which only holds 2,058,220 Arizona Star shares.
The dispute centres around Arizona Star's 25-per-cent interest in the Cerro Casale gold project in Chile. Arizona Star says the project, which is a joint venture with Bema and senior explorer Placer Dome Inc., should be put into production as soon as possible. Mr. Friedberg would prefer that the company closely examines any gold hedging agreements it enters before putting the project into production.
The option lawsuit
The soured relationship became worse this summer. Pan Atlantic sued the company over its stock option plan on Aug. 31, 2004, alleging the company's board granted itself "prejudicial" stock options. The company responded by having an independent evaluation prepared that showed the options were fair. That case has yet to be heard.
Judge Gill's order
Arizona Star and Pan Atlantic on Tuesday asked Judge Gill to sign a consent order outlining their agreed upon terms for the reconvened AGM. The order substantially grants Pan Atlantic most of the things it asked for in its petition.
The order appoints Vancouver securities lawyer Leon Getz to chair the meeting, with Arizona Star to pay for his services. Mr. Getz will have court-ordered authority to allow or disallow any proxies, with the exception of Pan Atlantic's proxy. Judge Gill's consent order specifies that Pan Atlantic's proxy is to be allowed.
The order also allows Enrique Fenig, Pan Atlantic's proxyholder, to have counsel present if he so chooses.
The parties agreed that a court reporter should record the AGM, to avoid a repeat of a poor quality audio recording of the first AGM.
The only point conceded by Pan Atlantic in the consent order is that its original proxy was not acceptable. Arizona Star has agreed to allow the proxy to be voted at the reconvened AGM.
The second AGM
Pan Atlantic's chances for replacing the company's board at the reconvened AGM now rest with Arizona Star's other shareholders. Voting in favour of a new board will be Pan Atlantic's 30.1-per-cent shareholding. Also likely to support Pan Atlantic's nominees is Continental Casualty, a Chicago-based shareholder whose proxy was also disallowed at the first AGM. Continental Casualty owns 4,550,100 shares, or 11.3 per cent of the total.
On the other side will be Bema Gold, which holds 2,058,220 shares, or 5.1 per cent of the total outstanding.
The company's remaining shareholders, representing approximately 53.5 per cent of the issued shares, will have a substantial say in the matter, assuming they file their proxies.
Pan Atlantic, on Dec. 3, 2004, filed a dissident circular outlining its reasons for establishing an independent board. Arizona Star director Clive Johnson responded with a letter to shareholders urging support for current management and its track record.
The campaign promises to be vigorous.
Arizona Star closed Tuesday at $5.81, down 19 cents. |
