Court rules against Polar Star

An Ontario court has rejected Polar Star Mining‘s (PSR-V) claim that former president and CEO, Douglas Willock, illegally solicited proxy votes for the company’s April 17 shareholders’ meeting.

The Ontario Superior Court of Justice has ruled that Willock, a director and dissident shareholder, has not breached the Canada Business Corporations Act.

The junior company, which has gold, copper and uranium projects in Chile, accused Willock ofsoliciting proxy votes before putting out a proxy circular.

Before Willock released his proxy circular he said he had receivd written support from 53.6% of shareholders. Willock said he did not solicit votes from more than 15 shareholders before putting out the circular, as the Act requires. Willock himself holds nearly 10% of the company’s shares.

Polar Star’s executive chairman Stephen Roman filed the claim against Willock. Willock called for a shareholders’ meeting in January with the goal of replacing the current board of directors.

The circular, which was released on March 9, says that Roman and some of the other board members disagreed with Willock about the viability of a pursing the acquisition of a small copper-gold mine located a few hours south of Santiago. Roman and the board wanted to focus on the company’s exploration projects; Willock and his supporters thought the mine would be a chance to generate cash for exploration.

In December 2008, Willock arranged a financing with GMP Securities and Deacon and Company Capital Markets, the terms of which included replacing several board members including Roman. When the board rejected the deal, Willock called for a shareholders’ meeting. The board voted to fire Willock from his position soon after, citing that he was in a conflict of interest in his rolesas management and dissident shareholder.

Polar Star later sought to make a deal with Willock whereby neither he nor Roman could hold a management positionor be the chairman. Under the deal,a new board be put in place consisting of Willock and a person of his choice, three current board members and two entirely new directors.Also,both parties would haveto end their litigation with the company picking up the tabfor the legal fees. Willock rejected the offer.