Skeena Resources sues largest shareholderSkeena Resources sues largest shareholder
2015-02-19 11:40 ET - Street Wire
Shares issued 163,375,428
SKE Close 2015-02-19 C$ 0.095
by Mike Caswell
Skeena Resources Ltd. has filed a lawsuit in the Supreme Court of British Columbia against its largest shareholder, Eilat Exploration Ltd., for violating restrictions on transferring shares. Skeena claims that Eilat pledged a block of shares to a European bank operating in the small island nation of Vanuatu. In doing so it violated a pooling agreement that restricts what it can do with its 64 million shares of Skeena, the company says.
The allegations are contained in a notice of claim that Skeena filed on Feb. 17, 2015, at the Vancouver courthouse. The case goes back to a property agreement dated April 14, 2014, in which Skeena acquired the Spectrum gold project in B.C. Among other things, the deal required Skeena to pay Eilat 64 million shares, representing 40 per cent of Skeena's outstanding total.
The shares, however, came with some restrictions. They would be held in escrow and gradually released over three years. In addition, as long as Skeena's share price remained under 50 cents, all of the shares would be subject to a pooling agreement. The agreement specified that Skeena's chairman, Ron Netolitzky, would hold the shares and vote them on behalf of Eilat.
The problem, as described by Skeena, began when the first block of shares (10 per cent) was released from escrow on Oct. 28, 2014. According to the suit, Eilat pledged the stock to a European bank in Vanuatu (a small country east of Australia known in financial circles as a tax haven and in shipping circles as a flag of convenience). The suit specifically complains that Eilat failed to deliver the stock to Mr. Netolitzky, as it was required to do.
The lawsuit seeks an injunction requiring Eilat to deliver the released shares to Mr. Netolitzky. It is also seeking an order that would apply to shares scheduled for future release from escrow. Vancouver lawyer Kenneth McEwan filed the lawsuit on behalf of Skeena and another company that was party to the Spectrum agreement, Keewatin Consultants (2002) Inc.