Bauxite settles legal dispute outside court
PERTH (miningweekly.com) – Explorer Bauxite Resources on Wednesday announced that it would avoid court proceedings in a proposed class action against the company, deciding instead to settle the claim.
The ASX-listed junior faced class action brought by individuals and entities that had acquired shares in the company's A$57-million capital raising in 2009.
The claimants alleged that the company had engaged in misleading and deceptive conduct in marketing the placement.
Bauxite reported that it had executed a conditional agreement to settle the claim, prior to any proceedings having been started.
“The settlement of this proposed shareholder action allows Bauxite Resources to focus on delivering our strategy. The company has consistently denied any wrongdoing, but defending a complex claim funded by a commercial litigation funder would inevitably have proved a significant distraction to the board and management,” said CEO and executive director Peter Canterbury.
He noted that legal fees alone could have been expected to be several million dollars.
Canterbury did not expect the settlement to have an impact on a proposed share capital return of 4c a share, which was approved by shareholders in August this year.
He noted that following the settlement and the share capital return, Bauxite would still have sufficient funding to meet both its short- and medium-term cash requirements under both its joint ventures, and for its Fortuna project, in Western Australia.
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