Boss Power Corp.

Boss Power Corp.

November 07, 2013 14:37 ET

Boss Power Says Don't Hand Control to Beruschi

Boss Power Nominees Will Consider All Alternatives, Act in Best Interest of Shareholders

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Nov. 7, 2013) - Boss Power Corp. (TSX VENTURE:BPU) ("Boss Power" or the "Company") today urged shareholders not to hand control of the company to the nominees of dissident shareholder Anthony Beruschi.

Boss Power said shareholders should not support a plan proposed yesterday by Beruschi. Boss Power believes it could hand Beruschi in excess of 47% of Boss Power's $30 million settlement agreement with the Province of British Columbia, which is far more than his fair share.

Boss Power also notes that Beruschi finally acknowledged yesterday to a disclosure omission in his dissident circular. As Boss Power first pointed out on Monday, the dissident circular omitted damaging but required bankruptcy information involving dissident nominee Kirk Shaw. Boss Power will comment below on this belated Beruschi admission as well as Beruschi's attempt to minimize it and bury it in the tenth paragraph of yesterday's dissident news release.

Boss Power reiterated that its five highly experienced nominees for the Board of Directors will review all of the available business alternatives to maximize value for shareholders and act in the best interests of all shareholders. Boss Power and Institutional Shareholder Services Inc. ("ISS"), the leading independent proxy advisory firm, recommend that shareholders vote the YELLOW proxy for the five new Boss Power nominees.

"As a last minute attempt to secure votes, Beruschi has announced a rash plan that may not protect the interests of shareholders, nor be the best approach for tax or other reasons. In contrast, Boss Power's nominees' are asking for shareholders' support on the merit of their qualifications and track records," said Ron Netolitzky, Boss Power's Chairman and Acting Chief Executive Officer.

"We urge shareholders to carefully question Beruschi's plan and note the large share of the settlement proceeds Beruschi could receive. There are many uncertainties in Beruschi's plan, including the actual form of his proposed transactions, missing valuation information, and a complete lack of information on the tax impact on Boss Power or its shareholders."

To avoid the risks associated with Beruschi, his nominees and his superficial plan, shareholders should vote the YELLOW proxy to appoint an experienced group of directors who will take the time to carefully consider all alternatives and act in the best interests of all shareholders.

Handing 47% to Beruschi is far too much

In the event that Beruschi's nominees are elected, Boss Power cautioned that they will have no obligation to carry out Beruschi's plan. But if they do carry it out, Boss Power believes Beruschi will be positioned to personally take in excess of $14.2 million, or 47%, of Boss Power's claims expropriation settlement with the Province of British Columbia. That percentage is far more than a fair share for Beruschi, who owns 32.6% of Boss Power.

There are two components to Beruschi's excessive proceeds of $14.2 million, Boss Power believes. They are:

  • $6.5 million as compensation from Beruschi's hand-picked nominees for Beruschi's many monetary disputes with Boss Power.
  • $7.7 million representing Beruschi's share of Beruschi's proposed $23.5 million distribution (assuming Beruschi can really deliver on his promise of $0.30 per share and assuming all shareholders participate).

Boss Power believes it is not coincidental that after Beruschi's proposed $23.5 million distribution, $6.5 million would remain. That's exactly how much Beruschi demanded from Boss Power on May 22, 2013 as compensation for his B Claims and several other monetary disputes with Boss Power.

Beruschi's demands include royalties, reimbursement of legal fees and taxes, and 2 million escrowed shares for mineral claims he never delivered. Other than the B Claims, Beruschi has never disclosed his demands to shareholders. Boss Power believes this is because Beruschi does not want shareholders to be aware of the extent to which his interests are not aligned with theirs.

Risks to the Beruschi plan

Boss Power believes that Beruschi's plan fails to carefully consider all issues and Beruschi cannot ensure that his nominees will be held accountable for Beruschi's promises. In particular, Beruschi's plan:

  • Purports to guarantee a minimum distribution to shareholders, even though Beruschi has no way of calculating what will actually be available for such distribution. It is unclear if Beruschi has taken into account:
    • Taxes payable by Boss Power on the $30 million settlement, the claims of other claimants to the settlement and Boss Power's legal fees related to the settlement;
    • Valuation and fairness opinion fees in the event of a share buyback;
    • Expenses for which Beruschi may first demand reimbursement, including his arbitration fees and his costs for the proxy fight he initiated; and
    • The likely, and excessive, $6.5 million that Beruschi demands for the B Claims, royalties and reimbursement of legal fees and taxes.
  • Appears not to take other business considerations into account. Such considerations, which Boss Power's nominees would weigh, might lead to better alternatives and more value for all shareholders. Boss Power believes that its nominees will review all of the alternatives and are much better positioned than the dissident nominees to select the most favourable alternative for Boss Power's shareholders.

Shaw's undisclosed bankruptcy augments mistrust

Among the many reasons to mistrust Beruschi and his team is the omission of required bankruptcy information involving dissident nominee Shaw in Beruschi's dissident circular. Boss Power is troubled by the belatedness of Beruschi's admission and Beruschi's assertion that the omission was not material. What other required disclosure might Beruschi and his nominees have omitted, or omit in the future, and justify on similar grounds?

It appears to Boss Power that there are multiple breaches by Shaw of this bankruptcy disclosure requirement. Boss Power notes Shaw's bankruptcy information was also not disclosed in documents filed over the past two years by at least two other publicly-traded companies where Shaw serves as a director.

For one of these companies, Ultra Resources Corp., Shaw also serves as the President and Chief Executive Officer, which further heightens his responsibility for the disclosure omission. Yet, Beruschi would have you believe that Shaw has "extensive experience with public company disclosure requirements," as Beruschi asserted in the dissident circular.

Boss Power believes that Shaw may be ineligible to stand as a director of Boss Power without the written consent of the TSX-Venture Exchange because securities regulators suspended trading in a company of which Shaw was a director. With Shaw's apparent multiple breaches of the bankruptcy disclosure requirement, such consent may not readily be forthcoming.

Shareholders should also mistrust Beruschi's description of Shaw yesterday as "a well-respected television and film producer." The Writers Guild of Canada, a trade association that governs many professionals in this industry, takes a different view. It has placed twelve of Shaw's productions on a warning list, labeling Shaw an "unfair engager" for failing to abide by the Guild's grievance procedures. When assessing Beruschi and his dissident nominees, Boss Power shareholders should take into account the Writers Guild warning against Shaw and Beruschi's failure to mention it.

Can Boss Power shareholders really trust Beruschi when he proposes a share buyback on behalf of his nominees? Boss Power believes the answer is NO. To protect their investment in Boss Power, shareholders should vote the YELLOW proxy for Boss' nominees who collectively have:

  • A deep background in geology, mineral exploration, accounting, venture capital and resource investment.
  • A track record of success in negotiations, value creation and mineral exploration.
  • A commitment to move the company forward in the best interests of all shareholders.

Boss Power urges shareholders to vote the YELLOW proxy and ensure Boss Power receives it prior to the voting deadline of 11:00 PM (Pacific Time) on Tuesday, November 12, 2013.

Boss Power's Letters to Shareholders, Management Information Circular and other proxy materials can be found on Boss Power's website:, as well as under its SEDAR profile. For assistance voting, shareholders should contact Boss Power's Proxy Solicitor, Laurel Hill Advisory Group, at 1-877-452-7184 (Toll-Free in North America) or Collect at 1-416-304-0211, or by email at

On Behalf of the Board of Directors of


Ron Netolitzky, Chairman and Acting CEO


Your vote is extremely important to the future of your investment in Boss no matter how many or how few shares you may own. Please discard any proxy or related materials you may have received from the Dissidents and vote using only the enclosed YELLOW voting instruction form FOR each of the Boss director nominees.

Even if you have already voted using the dissident proxy, you have every right to change your vote simply by executing the YELLOW voting instruction form enclosed: it is the later-dated voting instruction form that will be counted. If you have already voted your YELLOW voting instruction form, there is no need to vote again.

To ensure your vote is received in a timely manner, please vote via the internet at or by telephone using the phone number located on your voting instruction form. For assistance voting your YELLOW proxy please contact Boss Power's Proxy Solicitor Laurel Hill Advisory Group. Toll Free at 1-877-452-7184 or collect at 1-416-304-0211 or by e-mail at

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

Contact Information

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