Former Mediterranean Resources Ltd. (TSX: T.MNR, Stock Forum) President and chief executive officer Peter Guest has filed a wrongful dismissal suit against the company, claiming that he was terminated without cause.
In a civil claim filed in the British Columbia Supreme Court, Guest says he is now entitled to receive a severance payment from the Vancouver exploration company.
According to court documents, the decision to terminate the 73-year-old mining executive’s contract was made at a board meeting on March 15. The decision comes after a group of disgruntled shareholders launched a proxy fight to oust Mr. Guest and install a new slate of directors.
As reported by Stockhouse, the dissidents said Guest’s compensation – at $317,302 in 2009 – was excessive for a company that is trading at 16.5 cents, giving it a market value of $16.7 million.
The dissidents, led by British financier Frank Lucas, also said they were concerned about the lackluster performance of the company’s stock price, which they attribute to the lack of progress in developing the company’s flagship Yusufeli gold project in northeastern Turkey.
In a recent interview with Stockhouse, Guest said he was shocked to find himself at the centre of a proxy fight.
A highly experienced mining engineer, and member of the Australia rowing team that participated in the 1960 Olympic Games, he has worked for Robert Friedland (at Galactic Resources), amongst others, before acquiring an option on the Yusufeli gold property from Teck Resources Ltd. (TSX: T.TCK.B, Stock Forum) and (TSX: T.TCK.A, Stock Forum) in 2004.
Guest was employed by Mediterranean under an agreement dated May, 27, 2010, court documents show. The decision to terminate his employment was made by a three-to-one majority of the company’s board of directors two weeks ago.
While Guest was a member of the board, he did not vote on the decision to end his employment, according to the statement of claim.
Mediterranean officials could not be reached for comment on the suit. On March 16, the company issued a statement saying that Guest was no longer acting as President and ceo. It said Bryan Morris has resigned as a director, effective immediately.
John Clarke, a company director, has assumed the role of interim non-executive chairman of Mediterranean, while a search of Guest’s successor proceeds.