Morning Star Resources Ltd.

November 11, 2013 16:10 ET

Boss's Conflicted Directors Fail to Understand Blue Nominees' Equitable Plan to Return Capital to Shareholders

It is not too late. Vote your BLUE proxy today

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Nov. 11, 2013) - Morning Star Resources Ltd. (the "Concerned Shareholder") announced today that, when elected, the Concerned Shareholder's director nominees (the "Blue Nominees") will close the $30 million settlement, have an independent Court determine the fair value of the B claims and make a substantial return of capital to shareholders. The Blue Nominees are the only nominees who can do this and, for this reason, have received the support of Boss's independent director.

Management fails to grasp plan to fairly reward shareholders

The Blue Nominees' plan for Boss to make a substantial return of capital to shareholders after the settlement closes is inherently fair. Every shareholder will be afforded the same opportunity to "cash out" all, or a portion of, their investment at the same price. Under the plan, the price paid by Boss will be supported by a fairness opinion prepared by an independent Canadian investment bank. The conflicted directors have mischaracterized this plan because they cannot offer a solution which is as beneficial and equitable to all shareholders. If Ron Netolitzky's nominees are elected, Boss will be unable to close the settlement and will almost certainly return to years of costly litigation, which Boss can ill afford.

The Blue Nominees will also seek reimbursement on behalf of Boss for any money paid out for the B claims from those responsible for the breach of trust, challenge any legal fees wrongfully incurred by management for the unlawful purpose of protecting management's own self-interests, as opposed to the interests of Boss and its shareholders, and refuse to take stock options, which would dilute shareholders.

Management ignores serious claims by independent director

The Concerned Shareholder believes management's false outrage over immaterial issues is intended to distract shareholders from issues of real importance. In particular, management has been silent on the serious and disturbing truths identified by a current independent director in his statutory declaration. Shareholders can read excerpts from his statutory declaration for themselves in the Concerned Shareholder's news release on November 7.

The current independent director made clear that management's information circular contains materially inaccurate and misleading statements which, among other things, defame Mr. Beruschi and the Blue Nominees, and does not reflect the unanimous views and recommendations of the board. Accordingly, the Concerned Shareholder urges shareholders not to rely on the statements made by management in its information circular until such time as those false statements have been corrected and a new circular has been disseminated.

Management is burning through goodwill and wasting shareholder money

Shareholders must remember that this is not a normal proxy contest. How do the conflicted directors expect to reach a settlement for the B claims if they destroy all of their goodwill with Mr. Beruschi through unwarranted personal attacks? If Netolitzky's nominees cannot reach a settlement for the B claims, their only recourse will be the Province's risky court application to force closing of the settlement. The Concerned Shareholder believes strongly they would likely lose such an application. The result would be the loss of the $30 settlement and a costly return to trial for Boss.

If the settlement doesn't close, how will Boss afford to pay for more litigation? How is this plan "fair" to shareholders who ultimately must foot the bill? What is management hoping to accomplish through its personal attacks against Mr. Beruschi and the Blue Nominees? Why would management want to give Netolitzky's nominees 10% of Boss through low price stock options when those nominees have no knowledge on how to close the settlement?

The incumbent board has already used enormous financial resources to engage in frivolous legal battles, including wasting hundreds of thousands of dollars on an arbitration that the current independent director describes as "improper". Now the board, at great expense to shareholders, is risking the future of the company to put in place directors recruited by Netolitzky.

Don't let Boss's $30 million settlement be lost. Shareholders should vote their BLUE proxy or VIF by TUESDAY, NOVEMBER 12, 2013. A vote for your BLUE proxy or VIF is a vote to save the $30 million settlement and return funds to shareholders.

YOU MAY VOTE TO SUPPORT THE CONCERNED SHAREHOLDER'S NOMINEES EVEN IF YOU HAVE PREVIOUSLY DEPOSITED A PROXY IN SUPPORT OF MANAGEMENT. SUBMITTING A BLUE PROXY WILL AUTOMATICALLY REVOKE ANY PRIOR PROXY OR VOTING INSTRUCTION.

For assistance voting your BLUE proxy or VIF, shareholders should contact Valiant Trust Company toll-free at 1-877-699-4880 or 1-866-313-1872, or by email at inquiries@valianttrust.com. Our proxy circular and letter to shareholders has been mailed to shareholders and is also available on SEDAR at www.sedar.com. To keep current with further developments and for information about how to vote your shares, we have set up a website at www.bosspowerconcernedshareholder.com, which we encourage shareholders to visit regularly.

Contact Information