VANCOUVER, BRITISH COLUMBIA--(Marketwired - Oct. 30, 2013) -
Editors Note: There is a photo associated with this press release.
Boss Power Corp. (TSX VENTURE:BPU) ("Boss Power" or the "Company") today warns shareholders that dissident shareholder Anthony Beruschi is the problem, not the solution, for Boss Power. The Company also warns shareholders not to be deceived by Beruschi's misrepresentations in his October 28 Morning Star Resources Ltd. news release and dissident circular.
Boss Power is correcting the record regarding Beruschi's latest false allegations and inaccuracies. Boss Power also notes that in the dissident circular Beruschi appears to be preparing to buy shareholder support through the highly criticized practice of offering financial incentives to brokers who deliver proxies to him.
"Beruschi's plan for Boss Power is only intended to benefit Beruschi," said Ron Netolitzky, Chairman and Acting CEO of Boss Power. "We are confident that shareholders will see that his objective in this proxy contest is to get his hands on Boss' $30 million settlement with the Province of BC."
"What Beruschi did not say in his circular is especially telling. For example he was silent on the management of Boss Power under his nominees. Is this because he intends to be named President and CEO, as he was at Goldbank Mining Corp.? That is troubling because Beruschi extracted millions of dollars in compensation from Goldbank even as the shares lost 99.9% of their value under his 18-year leadership. Beruschi must be stopped before he does the same to Boss Power."
Boss urges shareholders to vote the YELLOW proxy in support of Boss' superior nominees and to protect the future of their investment in Boss.
Beruschi's so-called "solution" is a solution for Beruschi - not for all Boss Power Shareholders
If Beruschi's nominees are elected, there are significant monetary issues between Beruschi and Boss Power that are at risk of being resolved for the benefit of Beruschi. Shareholders need to ask - who will stand up for their interests when Beruschi is negotiating with his own hand-picked nominees.
As outlined in Boss Power's Management Information Circular, these monetary issues with Beruschi amount to many millions of dollars and include royalty compensation of $2.5 million that he has demanded for unproduced uranium. Beruschi's dissident circular is silent on nearly all of these issues. That's because he hopes that he can soon negotiate them privately with his nominees, to his benefit.
Moreover, if Beruschi and his nominees win they will have control of some $30 million from the pending settlement with the Province of British Columbia. Shareholders face the risk that a Board nominated by Beruschi will spend a significant portion of those funds for the benefit of Beruschi and not for the benefit of all shareholders.
A Court Valuation of Beruschi's B Claims may not be fair to other shareholders
One of the issues between Boss Power and Beruschi is a dispute over the value of Beruschi's B Claims. Of course there would be no dispute if Boss Power had delivered an unfairly large portion of the Government settlement to Beruschi. But the Boss Power Board correctly refused to put Beruschi's interests ahead of the interests of all shareholders.
Beruschi now says he will let a court decide a "fair" value of his mining claims if his nominees are elected to the Board. Here's the problem: The Court will determine the value of the B Claims based on submissions it receives from the two parties -- Beruschi on one side and his own hand-picked nominees on the other side. Berushi's emphasis on the court process to determine the value of his claims is a red herring. It conceals his tactics for positioning on both sides of the deal. A Court resolution has always been available to Beruschi but because of this self-interest he will only proceed if his nominees are in place. The crucial question is: who will protect the shareholder in this scenario?
Beruschi's current position also ignores the fact that the Province sought to pay the settlement funds into Court earlier this year, by consent, leaving the issue of the B Claims and other matters to be determined by the Court. Beruschi was the only party who opposed that solution. The fact that Beruschi is now willing to do so, if his ransom demands are met and his nominees are on the board, reveals his self-interested motivations.
Beruschi's Goldbank track record continues to be a warning for Boss Power Shareholders
Boss Power urges shareholders to read its Management Information Circular available at www.bosspower.ca for full details of the cautionary tale that Goldbank provides. Shareholders should be concerned that Beruschi's objective is to turn Boss Power into a new Goldbank, operating mainly for Beruschi's own benefit.
Beruschi is less than candid about his pay for non-performance as President and CEO of Goldbank, where he extracted $4.5 million over 18 years as the share price dropped by 99.9%. Of his compensation total, Beruschi cunningly defends his $0.8 million in Goldbank stock option grants on the grounds that he later cancelled them. But he fails to mention what Boss Power disclosed in its Management Information Circular--those stock options were worthless before he cancelled them, due to the precipitous decline in the price of Goldbank's shares under his leadership.
Boss Power has recently become aware of yet another Goldbank-related case involving Beruschi in the Supreme Court of Yukon. Goldbank's Qualified Person, geologist Chris Ash, filed this newly surfaced lawsuit. He alleged that Beruschi and another defendant failed to pay for Ash's Goldbank work even though Beruschi provided "written personal guarantees of payment." Ash also alleges that Beruschi "engaged in spreading falsehoods" about Ash, and that Beruschi and the other defendant used "false promises, intimidation tactics and threats" against Ash.
Boss Power notes that these allegations follow an earlier case summarized by Boss Power in its Management Information Circular on page 10 under the heading "Troubling allegations against Beruschi in Goldbank's Yukon lawsuit." Even though Beruschi has denied these allegations, Boss Power believes shareholders should be wary of Beruschi, especially if his nominees name him Boss Power's President and CEO.
Correcting Beruschi's false allegations and inaccuracies
Boss Power asks that shareholders note the following important corrections to Beruschi's latest false allegations and inaccuracies:
- Contrary to Beruschi's false assertions, Boss Power's nominees for the Board are not controlled by Anthem Resources Inc. While Anthem is a significant Boss Power shareholder, it did not play any role in the selection of Boss Power's nominees. The nominees were recruited by Netolitzky in his role of Acting CEO of Boss Power. The fact that Netolitzky is a non-management director of Anthem does not mean that Boss Power's nominees are being nominated by Anthem.
- The nominees of Boss Power have had major successes in mining, notwithstanding Beruschi's attempts to discount them. Beruschi, on the other hand, has failed to deliver any sustained value to shareholders in any of the three publicly traded companies for which he served as both CEO and a director. Beruschi's nominees do not have the deep background that Boss Power's nominees have in geology, mineral exploration, accounting, venture capital and resource investment. Shareholders should review the biographies included in the Boss Power Circular for full details of Boss Power's nominees' qualifications, experiences and past successes.
- Contrary to his assertions, Beruschi was acting as counsel for Boss Power at the time the trust agreements that transferred legal title of the B Claims to Blizzard, in trust, were drafted and owed Boss Power a duty of undivided loyalty. Beruschi sent Boss Power substantial accounts for legal services at the time, which related to the very matters underlying his present disputes with Boss Power. The trust agreements were prepared in terms that favour Beruschi's interests over that of Boss Power. They required Boss Power to continue to make payments to maintain the B Claims after Boss Power no longer had any option on them and denied Boss Power the opportunity to return them to Beruschi, without his consent, upon expiry of the option. Boss Power believes Beruschi may be liable to Boss Power for any and all losses arising out of his apparent breach of fiduciary duty.
Beruschi appears poised to BUY SHAREHOLDER support because he cannot win on merit
It appears that Beruschi himself is well aware of the shortcomings of his four nominees. That's why his dissident circular states "we may cause a soliciting dealer group to be formed to solicit proxies… for which we would pay customary fees."
Shareholders should be aware exactly what this statement means. Beruschi is not prepared to win the proxy fight purely on merit. Instead he appears to be preparing to offer financial incentives to lure brokers to secure their clients' proxy on his behalf. Brokers do not typically disclose to their clients the fact that their recommendation is fee-based. This is a practice that has recently been condemned by Canada's two national newspapers and the leading organization on corporate governance in Canada.
We urge shareholders to ask the following questions:
- Why is Beruschi prepared to use under-handed payments to obtain their vote?
- If they are paid to support Beruschi, are the brokers conflicted?
Act NOW to stop Beruschi and protect your investment in Boss Power
Shareholders are urged to vote the YELLOW proxy in support of Boss' qualified nominees well in advance of the voting deadline of 11 am (Vancouver time) on Tuesday, November 12, 2013. Shareholders who have questions or require assistance with voting may contact Boss' 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 email@example.com.
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.
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