Power struggle
The Coalcorp news after the bell on
March 5, 2009 was that Coalcorp's management had sacked three execs including Arata and that an investigation against the three and certain directors was ongoing and that they may take legal action.
This came subsequent to an announcement on
March 3, 2009:
"Coalcorp received notice from a group of former officers and directors of the Company, including the three terminated executive officers and its former
Chief Executive Officer, Serafino Iacono, of their intention to commence a court application for leave to file a derivative legal proceeding in Coalcorp's name under the British Columbia Business Corporations Act. The notice asks the Company to commence a legal proceeding against four of the six recently elected directors, a newly appointed director and certain of the recently appointed officers of the Company and shareholders in respect of alleged negligence, default, oppressive conduct and omissions, breach of duty or breach of trust. Two of the current directors, Robert Metcalfe and Allan Wakefield, who were directors during the tenure of these former officers and directors, have been excluded from the notice to commence this derivative proceeding."
So current Coalcorp's management threatens legal action against the three fired execs after the three fired execs and former CEO Iacono file a derivative legal proceeding against directors and officers of Coalcorp.
The implications for PRE right now are zero. This power struggle among Coalcorp has no impact on PRE's current or future business activities. Perhaps a couple of years down the road there may be implications if Arata and others were involved in wrongdoing with Coalcorp. At this stage, however, it is Coalcorp execs and directors who are in more legal how water than Arata or any others who are involved with Coalcorp. After all, it is the current Coalcorp directors and executive have been served with ongoing legal proceedings, not the fired Coalcorp execs and current PRE president Arata.
Essentially what we have is a very ugly power struggle between former and current execs and directors of Coalcorp. I can understand why the market may have concerns about this because of Arata's current status as president of PRE. But 11 million shares and a 15 per cent drop based on a squabble between a garbage coal company!!? The sell-off , IMO, is way overdone likely due to confusion over what the legal implications are for PRE. Great buying opportunity here.