Boss Power Corp.
TSX VENTURE : BPU

Boss Power Corp.

September 23, 2013 13:38 ET

Boss Power Formal Offer to Pay Morning Star's President, Anthony Beruschi, Fair Value for B Claims to Allow Boss' Settlement With the Province of British Columbia to Complete

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Sept. 23, 2013) - Boss Power Corp. (TSX VENTURE:BPU) ("Boss Power" or the "Company") announces today that it has made a formal offer to resolve its outstanding dispute with Morning Star Resources Ltd.'s ("Morning Star") President, Anthony Beruschi ("Beruschi"), in exchange for a payment of $1.55 million for Beruschi's B Claims, an amount substantiated by an independent valuation report (the "RPA Report") from Roscoe Postle Associates Inc. ("RPA").

In their recent press releases, Morning Star and Beruschi have asserted that the Concerned Shareholder, Morning Star, has made "numerous fair and reasonable proposals privately" to Boss' board "to allow it to deliver the B Claims to the Province all of which have been rejected or ignored". Morning Star has also argued that Boss' board has "failed to make a genuine effort" to reach a settlement of the B Claims dispute. Boss strongly disagrees with these characterizations of the past dealings, and remains of the view that Beruschi is attempting to leverage the risk to the settlement (the "Settlement") of Boss' action against the Province of British Columbia (the "Province") to extract more than his fair share of the $30 million proceeds of Settlement ("Settlement Proceeds") at the expense of Boss' other shareholders.

In a further effort to fairly resolve the B Claims dispute and complete the Settlement, as well as to allow shareholders to evaluate the truth for themselves, Boss has today made public its most recent settlement proposal to Beruschi, offering $1.55 million, payable from the Settlement Proceeds, in exchange for Beruschi's consent to the surrender of the B Claims. Boss' offer is based on an independent valuation report from RPA, and represents the mid-point of the range of values ($1.4 to 1.7 million) set out in the RPA Report.

Boss has also offered Beruschi the alternative option of submitting the value of the B Claims to binding arbitration in exchange for Beruschi's agreement to surrender the B Claims to the Province to allow the Settlement to complete. Pending the outcome of the arbitration, Boss would place $5 million of the Settlement Proceeds in trust as security for Beruschi's claim to compensation for the B Claims. Boss' Board believes that $5 million grossly exceeds the fair value of the B Claims but, in the interests of Boss and its shareholders, and to facilitate the expeditious completion of the Settlement, Boss is prepared to provide that security.

Mr. Netolitzky stated, "We have tried to make things very simple for Mr. Beruschi, he can accept our offer of $1.55 million or he can have an arbitrator determine the value of the B Claims. Either way, he will be paid fairly for the B Claims and Boss will be able to proceed with the Settlement with the Province. It is now over to Mr. Beruschi to decide whether he is going to continue to obstruct the Settlement with the Province."

The full text of Boss' settlement offer to Beruschi is attached. The full text of the RPA Report is available on the Company's website or upon request by contacting Karen Allan, Secretary, Boss Power Corp., (604) 688-8115.

On Behalf of the Board of Directors of BOSS POWER CORP.

Ron Netolitzky, Chairman and acting CEO

Neither the TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this release.

September 23, 2013
File no: 2156.001
WITH PREJUDICE
Via Email
Anthony J. Beruschi
#502 - 535 Thurlow Street
Vancouver, BC V6E 3L2

Dear Mr. Beruschi:

Re: Boss Power Corp.
Settlement with Her Majesty the Queen in Right of the Province of British Columbia - Blizzard Properties and other issues

As you are aware, we are counsel to the directors of Boss Power Corp.

We write regarding the on going dispute between you and Boss regarding your surrender of certain mineral claims known as the "B Claims" which the Province of British Columbia has required be surrendered as part of the $30 million settlement reached between Boss and the Province (the "Settlement") with respect to the Blizzard uranium deposit. The fundamental issue in that dispute is the fair value of those claims.

The directors of Boss, who are obligated to act in its best interests, taking into account the interests of all shareholders, have been and remain prepared for Boss to pay you fair value for the B Claims in return for your surrender of those claims as part of the Settlement. To that end, we are instructed on behalf of Boss to offer to settle the dispute between you and Boss regarding the B Claims on the following basis:

  1. written direction from you that the holders of beneficial title to the B Claims consent to the surrender of the B Claims to the Province as part of the Settlement;
  2. delivery to our office of a full and final release from you in respect of any claim you may have in respect of the B Claims, to be held on appropriate undertakings until delivery to you of the payment set out in paragraph (c) below; and
  3. payment to you of the sum of $1.55 million to be paid by Boss from and upon receipt of the proceeds of the Settlement.

The quantum of this offer is based on an independent valuation report obtained by Boss from Roscoe Postle Associates of Toronto, and represents the mid-point of the range of value set out in RPA's report for the B claims. A copy of this report is enclosed.

If you are not prepared to accept this offer, Boss - in exchange for your agreement to surrender the B Claims as part of the Settlement - is prepared to submit the issue of the proper value of the B Claims to final and binding arbitration conducted in accordance with the Arbitration Act, RSBC 1996, c 55 before a single arbitrator (jointly selected by the parties or, failing agreement, appointed by the BCICAC). Pending the outcome of this arbitration, Boss would place $5 million of the Settlement proceeds in trust as security for your claim to compensation for the B Claims. To be clear, in the view of Boss and its directors, that amount grossly exceeds the value of the B Claims, but in the interest of Boss and its shareholders, and to facilitate completion of the settlement, Boss is prepared to provide that security.

May we please hear from you within seven days of the date of this letter?

Yours truly,
Hunter Litigation Chambers
Per: "J. Kenneth McEwan"
J. Kenneth McEwan
JKM/mso
Encl.
cc Clients
Hunter Litigation Chambers Law Corporation J. Kenneth McEwan, Q.C.
2100 - 1040 West Georgia Street, direct: 604 647-3536
Vancouver, BC V6E 4H1 e: kmcewan@litigationchambers.com
tel: 604 891-2400 fax: 604 647-4554 PRACTICE CONDUCTED THROUGH A
www.litigationchambers.com PERSONAL LAW CORPORATION

Contact Information

  • Boss Power Corp.
    Tony Perri
    Investor Relations, Manager
    (604) 688-8115
    (604) 669-2543 (FAX)
    www.bosspower.ca