http://casselsbrock.com/CBNewsletter/Securities_Litigation_Group_e_LERT___Cassels_Brock_Updates_Law_Pertaining_to_Invalidity_of_Shareholder_Requisition_to_Remove_Incumbent_Board_of_Directors

Securities Litigation Group e-LERT - Cassels Brock Updates Law Pertaining to Invalidity of Shareholder Requisition to Remove Incumbent Board of Directors

Published: 03/04/2011

By Robert B. Cohen, Lorne Silver, Jessica Zagar

On February 22, 2011, Cassels Brock appeared before the Ontario Superior Court of Justice on behalf of Ursa Major Minerals Incorporated and successfully attacked the validity of a shareholder requisition seeking to remove an incumbent Board of Directors. By way of background, Inspiration Mining Corporation, a shareholder holding more than 16% of the shares of Ursa Major, requisitioned a special shareholders’ meeting by delivering a notice to Ursa Major dated October 29, 2010. The stated business to be conducted at the meeting was the election of a Board of Directors as proposed by Inspiration. The notice did not include the names or biographical information of any of the proposed nominees. On November 19, 2010, the shareholders’ meeting was scheduled for March 3, 2011.

Leading up to the shareholders’ meeting, Ursa Major repeatedly asked Inspiration to provide the names and biographical information of its nominees, but Inspiration refused to, arguing that it was not required to do so. On February 2, 2011, Ursa Major cancelled the meeting on the basis that it could not disseminate a management information circular with a recommendation as to how shareholders should vote in respect of a slate of directors whose identities were unknown. On February 23, 2011, Madam Justice Mesbur rejected Inspiration’s position that Ursa Major cancelled a validly requisitioned special meeting of Ursa Major’s shareholders and held, consistent with Ursa Major’s position, that Inspiration delivered an invalid requisition. Madam Justice Mesbur agreed with Ursa Major’s argument that a Board of Directors cannot adequately inform the shareholders of the business to be conducted at a meeting to remove directors unless the shareholders are also advised about who is being proposed to replace the directors.

Cassels Brock & Blackwell LLP acted for Ursa Major Minerals Incorporated with a team that included Lorne Silver, Robert Cohen and Jessica Zagar (Securities Litigation).