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Note:Following the unfriendly acquisition of Seabright Resources, Inc., the new corporation into which it was amalgamated, Westminer Canada Holdings Limited sued its former directors for fraud, civil conspiracy, failure to disclose material changes, and insider trading in Ontario. At this time, the former president of Seabright and some of the former directors were attempting to raise capital in the public markets to retire loans borrowed to fund a new venture which they had backed.

The National Bank lent CA$15 Million to fund the purchase of Cavalier and the public offering to be secured by LCs. Investors provided LCs which were to be extinguished after the public offering. When difficulties were encountered, the LCs were extended. When plans for the public offering were discontinued, the investors were faced with the pending expiration of the LCs and the likelihood that the lender would draw on them. As an alternative, they were offered the option of investing in Cavalier. Their funds would then repay the loan. More than CA$11 Million was raised.

As a result of the action by Westminer, no public offering was made and the new venture became insolvent. An action was filed by some former directors against Westminer in Nova Scotia in which they did not prevail.

Subsequently, investors in Cavalier filed the instant action in Nova Scotia charging civil conspiracy, unlawful interference with economic relations, and negligence. The Nova Scotia Supreme Court, Moir J., denied relief.

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