MPL COMMUNICATIONS INC.

MPL COMMUNICATIONS INC.

March 04, 2011 22:01 ET

MPL Directors Approve Settlement Proposal in Minority Shareholder Action

TORONTO, ONTARIO--(Marketwire - March 4, 2011) - On February 28, 2011, the board of directors of MPL Communications Inc. approved a payment proposal from Marpep Publishing Limited in settlement of a judgment award issued by the Alberta Court of Queen's Bench. The board also directed that the proposal be brought back to the court to seek its approval.

The new payment proposal would see Marpep pay MPL $1.1 million on acceptance by the court and a further $235,412 in equal monthly payments through June, 2012. At that time the balance of the award owing would be $774,621 which is equivalent to the accrued compensation owed by MPL to Barrie Martland, president of MPL, and Stephen Pepper, chairman of MPL. Messrs. Martland and Pepper are also officers and directors of Marpep. The MPL board will determine at that time whether to pay some or all of the accrued compensation and set the terms to offset those payments against the balance of the judgment award.

In November, 2010, the court had set aside an agreement previously approved by the MPL board with regard to the payment of the amounts owed by Marpep. In its place the court ordered that Messrs. Martland and Pepper would be jointly and severally responsible together with Marpep for the original judgment amount plus interest awarded to MPL from Marpep.

Further, the court ordered that 5,745,556 MPL shares owned by Marpep, 1,729,250 MPL shares owned by Mr. Pepper and 1,086,250 MPL shares owned by Mr. Martland be sold with the proceeds to be paid to MPL in reduction of the judgment award. The sale is to be conducted by sealed bid with bids for cash and with a set closing date. If, after the sale of the shares, there were a deficiency owing in the amount of the judgment award, the matter would be addressed by the MPL board. However, payment of the judgment would remain under supervision of the court.

The court also ordered that no retiring allowance be paid or negotiated by the MPL Board for either Mr. Pepper or Mr. Martland without independent expert input.

On Dec. 15, 2010, MPL, Marpep and Messrs. Martland and Pepper filed an appeal in the Court of Appeal of Alberta in which they have appealed parts of the November Court of Queen's Bench judgment.

Specifically, the appellants claimed that the trial judge erred in rejecting a payment proposal by Marpep which the MPL board had accepted on May 27, 2010; that joint and several liabilities should not have been imposed on Messrs. Martland and Pepper; that ordering the sale of MPL stock owned by Messrs. Martland and Pepper in their registered retirement funds violated Alberta statutory protection from judgment creditors; and the court erred in invalidating the severance clauses in MPL's employment contracts with Messrs. Martland and Pepper.

When the new payment proposal is presented to the court for approval in place of the November judgment, MPL and Marpep will ask that the November judgment remain in force but its orders stayed to be acted on only in the event of any default.

Contact Information

  • MPL Communications Inc.
    Stephen D. Pepper
    Chairman
    (416) 869-1177
    spepper@mplcomm.com
    or
    MPL Communications Inc.
    133 Richmond St. West
    Toronto, ON M5H 3M8