Hayward's lawsuitHollund countersued by Liem for defamation
2008-09-12 17:04 ET - Street Wire
by Mike Caswell
Erwin Liem has filed a countersuit against Langley promoter Lonnie Hayward, alleging that Mr. Hayward defamed him in a June 25, 2008, news release. The release said Mr. Hayward's company, Hollund Industrial Marine Inc., could suffer irreparable harm after Mr. Liem improperly obtained 25.5 million shares.
Mr. Liem also alleges that Mr. Hayward illegally profited by trading five million Hollund shares. He says Mr. Hayward traded the shares when the company issued a misleading news release promoting itself as a technology developer.
Hayward's lawsuit
The dispute became public on June 17, 2008, when Mr. Hayward and Hollund sued Mr. Liem in B.C. Supreme Court. They alleged that he held 25.5 million Hollund shares that should have been delivered to Mr. Hayward.
The suit also named as a defendant controversial Vancouver lawyer John Briner. It said that Mr. Briner breached a contract in which he agreed to deliver 98 per cent of Hollund to Mr. Hayward.
According to the complaint, Mr. Briner delivered all the certificates except for one that was in the name of Mr. Liem's company, President's Corporate Group Inc. That certificate was for 1.5 million shares. Those shares became 25.5 million shares after Hollund split 17:1.
Hollund alleged that Mr. Liem divided the stock into five separate certificates, and had 17 million shares held in the name of Rahn and Bodmer Bannquiers, a Swiss brokerage, and 8.5 million in the registration name Cede & Co.
Hollund sought damages, an interim injunction to keep the certificates from being further divided and an injunction ordering their return. It also sought damages against Mr. Liem and Mr. Briner for conspiracy.
Liem's counterclaim
Mr. Liem filed a countersuit on Sept. 2, 2008. He accuses the company of defamation and Mr. Hayward of illegally profiting from trading.
The countersuit says that Hollund and its president, Michael Lacy, maliciously wrote a news release about the lawsuit on June 25.
The release stated that the suit had been filed, and it identified Mr. Liem and Mr. Briner as defendants. It said that the company had secured an injunction restraining the transfer of 25.5 million illegally issued shares.
It also stated that the company will suffer irreparable harm "because of the past conduct and questionable dealings" relating to Mr. Liem's company, President's Corporate Group.
Mr. Liem says the news release was a deliberate attempt to embarrass him and damage his reputation. He says the words mean that he is unethical, unfair and dishonest, and that he frequently engages in theft, fraud and criminal misconduct.
Mr. Liem also claims that Mr. Hayward made substantial illegal profits from Hollund trading. He says Mr. Hayward caused the company to issue a false and misleading news release on June 25, touting itself as a "technology development and production company." Mr. Hayward allegedly traded over five million shares the day before and the day after the news release.
According to the counterclaim, Mr. Hayward controlled 252 million of the company's 283 million shares, through 15 nominee accounts. After securing an injunction preventing the transfer of Mr. Liem's stock, Mr. Hayward had "cornered the market" for the stock.
"The Plaintiff and his nominees knew or ought to have known that their conduct would likely cause injury to the minority shareholders," the counterclaim reads.
Mr. Liem is seeking an injunction restraining further defamatory statements; aggravated, punitive and exemplary damages; plus costs and interest. He is represented by Vancouver lawyer John Frank.
In addition to naming Mr. Hayward, Mr. Lacy and Hollund as defendants, the counterclaim names 15 alleged nominees. They include 10 private companies and five of Mr. Hayward's relatives.
Briner's counterclaim
Mr. Liem's suit comes three weeks after Mr. Briner filed his own countersuit on Aug. 13, 2008. He alleged he was defamed and intimidated.
Mr. Briner said he received a threatening note at his house on June 23, 2008. In a typed statement, it said he should prepare a $225,000 (U.S.) certified cheque in the name of Jasmine Investments in five days. Mr. Briner said Jasmine Investments is a company owned by Mr. Hayward.
On the reverse it allegedly had a hand-written statement, which read, "SOME PEOPLE ARE BOOK SMART AND LIFE STUPID JOHN." Mr. Briner says the note caused fear, alarm and emotional distress to his family.
He also sued for defamation over the company's June 25 news release. He said it was false and was a deliberate attempt to destroy his reputation.
The counterclaim named Mr. Hayward, Hollund and Mr. Lacy as defendants.
Mr. Briner sought damages for defamation, intimidation, breach of contract, plus aggravated, punitive and exemplary damages. The countersuit was filed on his behalf by David Lunny of Devlin Jensen.
Hollund claims to be developing an underwater manipulator arm called TigerLynk that can be used for construction projects. It closed Thursday at 8.8 cents.