In the first week of January, Lanny McDonald was cross-examined by Brookfield.
We are currently analyzing the transcripts and preparing for our next court date which will be June 15, 2016.
. . . and cut him a sweetheart deal?
What was the sweetheart deal?
On November 27th 2008, one day after Brookfield created the Hammerstone Corp, Brookfield offered billionaire Pattison 30% of Birch Mountain's $1.6B asset ---- before PWC even had time to market or sell the asset. How can Brookfield make a deal with an asset that's in receivership and they didn't yet own? You can view the sweetheart deal here: http://www.brookfieldclassaction.com/Assignment%20And%20Option%20Agreement.pdf
"In court documents, the plaintiffs also single out Vancouver billionaire Jim Pattison, a Brookfield director. He is not named as a defendant, but the plaintiffs allege that he not only held a Birch Mountain debenture of his own, but also signed an option agreement allowing him to take a 30-per-cent stake in Brookfield’s new owner of the limestone quarry, known as Hammerstone Corp. The shareholders allege in court documents that this “preferential treatment” given to an insider like Mr. Pattison, which was never disclosed to the receivership judge, could have violated disclosure or insider-trading rules. Mr. Pattison could not be reached for comment Tuesday." (Jeff Gray - The Globe and Mail Squeezed-Out Birch Mountain shareholders take on Brookfield)
Why did Brookfield file James Pattison's share disclosure after shareholders voted?
It seems billionaire James Pattison was on the board of Brookfield Asset Manangement. It seems (according to his SEC filing) that he owned a control block of shares of Birch Mountain but never got around to disclosing those shares in Canada or the US in a timely manner. So, none of the Birch shareholders knew that an insider at Brookfield already held a control block of Birch shares when they voted for the debenture in May of 2008. It was only after Brookfield served notice of an Event of Default to Birch and then filed their Early Warning Report that we also find out about Pattison's shares.
In the US we call a situation that looks similar - securities fraud. When Ivan Boesky was implicated as buying and holding stocks for Michael Milken until Milken needed them for a takeover - it was called stock parking. I think Milken went to jail over that and other securities violations. http://articles.latimes.com/1990-04-21/business/fi-1282_1_michael-milken
"Stock parking represents collusion and artificial manipulation of the market. As is often the case with SEC regulations, the severity of the punishment for colluding to park shares largely depends on the severity of the infraction; the number of shares traded, the amount of taxable income unregistered and the scale of the conspiracy." Read more: Parking Definition | Investopedia http://www.investopedia.com/terms/p/parking.asp#ixzz3xMV54Izi
Oh, right. And the stock price had been plummeting, remember?
So, I guess the question is - was Brookfield engaging in Stock Parking with one of their directors, Pattison?
Are the similarities remarkable?
Watch the short video for yourself - less than 4 minutes.
What do you want to do today?
Our heartfelt thanks to all the shareholders
who have contributed time, effort, and money
to help us forward this lawsuit.
Wishing you Peace, Joy,
Hope and Happiness
and prosperity in the New Year.
How much was Brookfield Asset Management willing to spend to develop the quarry? After it was in their hands?
Table 1: Components and Construction Schedule for the Limestone Processing Facilities (Hammerstone Project Update, October 2009) Source: https://nrp.nrcb.ca/Portals/1/Documents/Decisions/Hammerstone/Hammerstone-decision.pdf
November 5, 2008, in Receivership Court Transcript Excerpts
Mr. Gorman is from Norton Rose Fullbright law firm and is counsel for Brookfield Asset Management
22 MR.GORMAN: Sir, I don’t know if you had a chance to receive
23 the material. I don’t think this morning is going to be at all contentious.
25 Submissions by Mr. Gorman
27 MR.GORMAN: It’s my application on behalf of Tricap Partners
28 Ltd. as a secured lender over Birch Mountain Resources Ltd. --
30 THECOURT: Right. No, I did receive the materials,
31 Mr. Gorman, I did look at them and, in some ways, I really only have one question. It
32 seems to me, given this was going to be a consent and isn’t going to be contentious, why
33 are we proceeding by way of a court-appointed receiver, instead of just -- because I -- I
34 got through the instrument, the instrument has receiver provisions in it.
36 MR.GORMAN: Well, I think -- certainly, the starting point, this
37 company’s going to need some -- some DIP financing --
39 THECOURT: Oh, I see, okay.
41 MR.GORMAN: -- and of a serious amount. The order right
1 now provides for $2 million in receiver certificates. The cash flows we received from the
2 company would suggest, to -- to keep operating ’til January 31, they will need 4 million.
3 Whether they operate or not is something that we’ll learn in due course.
5 THE COURT: So, Mr. Roberts have to organize the Christmas
6 party, they need $2 million?
What is being said here?
The Court seems to be asking why the Receivership is being switched from a debtor receivership to a court appointed public receivership? Why? (We'll make a guess in the next post).
The company only needed $4M to get through to January 31st, 2009? Then what? Perhaps a very lucrative contract in the wings?
January 8,2009, Receivership Court "Sale of the Asset" Transcript Excerpts
33 The Receiver carried out its own sales process for a variety of reasons, but in a harsher
34 economic environment than before, and although there were 18 people who kicked the
35 tires, no one wanted to buy the Chev. So, the only party who came up with the offer is
36 Tricap, and they’ve done it in the form of forgiveness of debt offer.
What is being said here?
Mr. Gorman seems to be trying to paint the picture that the company/asset might be like this:
$737M investment would certainly make the Chev more like this:
Seems the Chev was worth saving!
If you received a phone call asking if you were a Birch Mountain shareholder - it's true - we're looking for you.
This is the unofficial blog site for Birch Mountain shareholders.
A lawsuit against Brookfield Asset Management was initiated by Birch Mountain shareholders in the pursuit of recovery for the "acquisition" by Brookfield of our $1.6 billion asset - the Hammerstone Project. We're in year 7 of the lawsuit and we're nearing the end. You can browse this site and find random information or check back weekly for new updates as we explain where we are in the process.
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