PMCC Moves to Set Aside Security Granted by ICMI
Precious Metal Capital Corp. announces that it has filed motion material in its action in the Ontario Superior Court of Justice Commercial List (Court File No. 07-CL-7224) against International Consolidated Minerals Inc. et al., to add as defendants “redemption rights” holders and secured creditors of ICMI, including Platinum Partners Value Arbitrage Fund L.P., and for a declaration invalidating certain grants of security interests over ICMI’s assets, including the Pachapaqui Mine. PMCC’s application for an injunction restraining ICMI from making further redemption rights payments and from granting any security interest over the Pachapaqui mine is pending.
In the Action, PMCC claims that its agent, Gregory Peebles, acquired the Pachapaqui Mine in breach of fiduciary duties and duties of confidence owed to PMCC, and then sold the mine to International Consolidated Minerals Limited (“ICML”). In September 2007, ICMI acquired ICML in a reverse-take-over transaction valued at $US240 million (the “RTO”). At the time ICMI’s assets consisted of US$77.9 million in cash. PMCC is seeking a declaration that the defendants hold title to the Pachapaqui Mine in trust for PMCC, or in the alternative US$200 million in damages.
PMCC has applied to amend its claim to allege that ICMI, certain of its shareholders, and ICML conspired to defraud the shareholders of ICMI and ICML, the public, and PMCC through the illegal acquisition of ICML, by misrepresenting the terms of the RTO and conducting an illegal shareholder vote which approved the RTO and granted “redemption rights”, and thereby has improperly paid out over US$30 million from the company.
On November 29, 2008, the Ontario court issued an injunction restraining the defendants from pursuing a parallel legal action commenced by them in the courts of England. This decision follows the dismissal of the defendants’ motion to stay the Action, and the dismissal by the Ontario Court of Appeal of their appeal.