April Div Announced and Bennett Update VANCOUVER, BRITISH COLUMBIA--(Marketwired - April 5, 2016) -
NOT FOR DISTRIBUTION TO US NEWS WIRE SERVICES OR FOR US DISSEMINATION.
Diversified Royalty Corp. (TSX:DIV) (the "Corporation" or "DIV") announces the status of the John Bennett indemnity proceedings in the Ontario Court.
As previously disclosed, Mr. Bennett, a former CEO of the Corporation until early 2004, was charged in 2009 with conspiracy to defraud and major fraud against the United States, and was extradited to New Jersey in November 2014. The trial commenced on February 22, 2016, and on March 16, 2016, the jury returned a guilty verdict on both counts against Mr. Bennett.
Pursuant to an Ontario court Order, since 2010 the Corporation has been required to indemnify Mr. Bennett on an interim basis for reasonable legal expenses he incurs in connection with his criminal defense. The Corporation filed an urgent motion on March 17 with the Ontario court to have this Order set aside on the basis that Mr. Bennett is not entitled to indemnification from the Corporation as a result of the guilty verdict. This motion was heard yesterday and the Ontario Court found that the guilty verdict was still subject to confirmation by the trial judge in the United States as a result of Bennett's pending motions to set aside the verdict, with the result that the Interim Order should remain in place at this time. The Corporation was also required to pay Bennett's costs of the motion in the amount of $50,000. As at the current date, the Corporation has received invoices of approximately US$1.2 million (including amounts incurred in the month of February and into March) from Mr. Bennett that remain to be paid under the Ontario court Order, and the Corporation is aware that additional costs have been incurred by Mr. Bennett in his legal proceedings, but not yet invoiced (for the month of March, which include additional trial expenses up to March 16th). The ruling on the confirmation of Mr. Bennett's verdict by the trial judge in the United States is expected to occur on or before his sentencing date of June 27, 2016.The Corporation expects Mr. Bennett's legal costs between his trial's completion on March 16th and June 27th to be significantly less than those incurred during his trial.
"Yesterday's decision was very disappointing. Management has made every effort to protect the assets of DIV along the way, including challenging John Bennett's right to advances on indemnification several times as well as challenging the reasonableness of his legal expenses. DIV is considering its options as to next steps, including seeking leave to appeal the Court's decision and leave to stay the order pending the determination of the motion for leave to appeal. Additional updates will be provided as this matter develops," said Sean Morrison, CEO of DIV.
April Dividend
DIV is pleased to announce that its board of directors has approved a cash dividend of $0.01854 per common share for the period of April 1, 2016 to April 30, 2016, which is equal to $0.2225 per common share on an annualized basis. The dividend will be paid on April 29, 2016 to shareholders of record on April 15, 2016.