TORONTO, June 17 /CNW/ - The TriNorth Concerned Shareholders today
reminded their fellow investors that their opportunity to force change at
TriNorth Capital Inc. expires tomorrow. The deadline for voting the Yellow
Proxy is noon Thursday June 18, 2009.
"TriNorth shareholders have an opportunity to send a resounding message
to the Current Board that the owners of the Company will not be ignored,
misled and underserved by their directors," said Concerned Shareholder Tony
Busseri. "This chance may not come again. It should only be ignored by those
who are satisfied with destruction of shareholder value coupled with arrogance
under this Board. We believe the great majority of TriNorth shareholders
welcome the possibility of real change under a new Board of Directors."
Since it was launched, the Concerned Shareholder campaign has coincided
with higher prices and volume in the trading of TriNorth shares. Significant
Company information has been revealed only because of questioning by the
Concerned Shareholder. This trend can continue with a new and independent
Board comprising the Concerned Shareholders' nominees. The alternative is the
current regime and the prospect of further dismal performance and questionable
treatment of TriNorth by the Company's Manager. It is clear that the Current
Board will not consider meaningful change and will not change the status quo
with the Manager it is linked with. This situation can change only if
shareholders change the Current Board. The next 24 hours is the only chance
for shareholders to liberate TriNorth from the compromised and conflicted LAMI
The Concerned Shareholders ask their fellow shareholders to consider four
things as they make their decision:
The Concerned Shareholders Continue to Seek Truly Independent Oversight
of Lawrence Asset Management Inc. (LAMI)
Under the management of LAMI, TriNorth shares lost 90% of their value in
less than a year. They performed three times worse than the overall market
over that time. There is little comfort in the knowledge that LAMI itself was
among the worst performing investment managers in Canada and, as of May 31
2009 its Lawrence Partners Fund (LPF) has produced a three year return of
minus 29% compared to its peer average of minus 3%. Similar to TriNorth's
share price performance, as the broader public markets have improved, LPF has
produced a minus 38% return versus a peer group return of 2% over the six
month period ending May 31,2009.
A majority of the Current Board either work for LAMI or have business or
personal relationships with LAMI.
These facts are known. What is not known, because of the exceedingly poor
disclosure by TriNorth, is to what extent TriNorth was used to help support
LAMI's other investments recently. Shareholders of TriNorth are entitled to
know whether an independent review of related party transactions reveals
assets and value that should be repatriated to TriNorth. This will never be
known under the Current Board, which is clearly beholden to LAMI and its other
Under the existing Board structure, John Crow, who has a business
relationship with LAMI, is Chairman of the Board, Chairman of the Audit
Committee and Chairman of the Corporate Governance Committee, which is
responsible for disclosure. Mr. Crow has failed to demonstrate any
understanding of what "independence" means in the context of the TriNorth
management structure. He has focused on the wrong issues and ignored the real
issue: whether the Current Directors are independent of LAMI and will hold
LAMI accountable for how TriNorth is treated compared with LAMI's other
John Crow and the Board of TriNorth have yet to answer some key
questions: Did they know at the time of the Company's May 9, 2008 press
release that the Russian oil and gas interest was encumbered by $24 million of
debt and that this debt was current? Why did they not disclose this
information to current and prospective shareholders? Who benefited from the
non-disclosure of these facts? Did the debt restructuring that diluted
TriNorth and increased the ownership of LPF comply with securities laws in
Ontario concerning related-party transactions? Was TriNorth treated fairly?
The prospect of this transaction being overseen and personally "approved" by
John Crow, who is employed by LAMI, provides no comfort to shareholders. We
are still waiting for answers from this Board.
Question for Shareholders: Why has the Current Board apparently done
nothing about LAMI's calamitous results?
Ravi Sood's Threats Are Empty
TriNorth Director and LAMI President Ravi Sood has claimed, on the one
hand, that the Concerned Shareholders aim is to terminate LAMI and him. In
that case, he claims he would take legal action that would destroy TriNorth in
a "scorched earth" strategy. On the other hand, he also threatens that he and
LAMI will resign if the Concerned Shareholder Nominees are elected.
The Concerned Shareholders have explicitly stated in the past that
terminating LAMI and Mr. Sood was not the motivation for seeking a new Board.
As stated repeatedly, that motivation was to sever the inappropriately close
links between LAMI and the Board that is supposed to oversee it.
However it is clear that Mr. Sood is vehemently opposed to being
responsible to anyone but the Current Board. His behaviour, misleading
statements and personal attacks on the Concerned Shareholder and his nominees
have been unprofessional and a clear breach of his duty to all TriNorth
Shareholders. Mr. Sood has revealed that his priority is entrenching the
Current Board to serve the interests of LAMI and its other priorities and not
the best interests of TriNorth shareholders.
If Mr. Sood and LAMI were to tender their resignation and provide the
required 120 days notice to the new Board consisting of the Concerned
Shareholder Nominees, those resignations would be accepted. It is known that
Mr. Sood, or others on his behalf, have made commercial or legal threats
against individuals seeking to replace the Board. The Concerned Shareholder
Nominees are not intimidated by these threats from a manager who lost 90% of
his client's value in less than a year.
The Concerned Shareholder Nominees' plan remains:
- To engage an independent financial advisor to examine all
value-creating alternatives for shareholders of TriNorth.
- To review the recent performance of Lawrence Asset Management Inc.
as well as to conduct an independent review of potential
related-party transactions over the past 18 months with the hope
of being able to assure the marketplace that no improper activities
have taken place at TriNorth.
- If LAMI resigns before or during that review, the new Board will
consider its options which include engaging an alternate, unrelated,
manager within the four months of LAMI's notice period or selling all
or part of the Company. The Concerned Shareholder sees the windup or
sale of TriNorth as an increasingly attractive direction and, without
access to Company information, estimates such an action could deliver
up to $0.15 per share to TriNorth shareholders.
Question for Shareholders: Is it preferable to wind up TriNorth now and
extract the value that has not been recognized under the Current Board or to
wait for LAMI to reverse the damage it has done -bearing in mind that LAMI
itself sees no near-term potential and sold most of its own TriNorth shares
several months ago?
The Concerned Shareholders Will Accept No Compromise from the Current
The actions and statements of the Current Board since May 29 have been so
far below acceptable standards of behaviour that the Concerned Shareholder
Nominees cannot be expected to serve on the same Board as any of the Current
Directors, who are clearly beholden to LAMI. The Concerned Shareholders have
withdrawn the earlier compromise proposal of a new board comprising two
Current Directors, two Concerned Shareholder Nominees and a mutually
acceptable third party.
Any such compromise Board would be dysfunctional and would serve TriNorth
shareholders even worse than the Current Board. Chairman John Crow and Ravi
Sood, a TriNorth Director as well as President of LAMI, the Company's Manager,
have made it clear that neither will continue their relationship with the
Company without the other.
Questions for shareholders: What is the nature of the business
relationship between the Current Board and LAMI that means the relationship
cannot bear independent external examination? Why are Mr. Sood and LAMI so
opposed to an independent Board for TriNorth? What are they afraid of? A
manager acting in good faith in the interests of TriNorth should have no
concerns about independent board scrutiny and accountability.
The Current Board Has Offered Virtually No Defence Of Its Dismal Record;
It Has Only Attacked
Since the Concerned Shareholder announced the campaign to replace the
Board, the Current Board has failed to engage in any meaningful discussion of
the issues that prompted the campaign: shareholder value, shareholder
interests, and shareholder disclosure. Instead, the Current Board, at the
expense of all shareholders has launched meritless legal actions, hired
private investigators, disseminated false information which it has never
corrected or retracted, threatened, intimidated and misrepresented. It has
refused to consider reasonable compromises that would have allowed for
continuity and fresh perspectives on the Board. Their behaviour reveals a
concern only for LAMI and the Current Board remaining in place and no interest
in what is best for shareholders.
Question for shareholders: Is a Board that reacts in this way but never
responds to legitimate shareholder concerns a Board you can trust to protect
your interests and create value for you?
Voting is Vital and Confidential
Time is short. The Concerned Shareholders recommend that TriNorth
investors vote the YELLOW proxy for the needed change at the Company, and
discard the white or blue proxies they may have received. To be voted at the
Annual Shareholder Meeting, YELLOW proxies must be received by no later than
noon (Toronto time) on Thursday June 18, 2009.
Your vote is completely private. In response to concerns expressed by
TriNorth shareholders, the Concerned Shareholders advise that there is no
reason to fear retribution from TriNorth, its Board of Directors or advisors
for voting the YELLOW proxy in support of the Concerned Shareholders'
nominees. Shareholders are protected by, first, the confidentiality of the
proxy voting system. There is also protection in the fact that, at the present
rate of voting support for the Concerned Shareholder nominees, the Current
Board will be replaced and will not be in a position to act against any
shareholder or other party.
For more information, call The TriNorth Concerned Shareholders at
905-334-5495 or go to www.yourtrinorth.com.
The Concerned Shareholder Proxy Circular has been filed with securities
regulators and has been mailed to all TriNorth shareholders along with a
Yellow form of proxy to be used to vote to replace the Board and to oppose
management resolutions at the Annual Shareholders Meeting. The Proxy Circular
is available at www.sedar.com and at www.yourtrinorth.com.
For further information:
For further information: TriNorth Concerned Shareholders, Tony Busseri,
(905) 334-5495, www.yourtrinorth.com; Media, John Lute, Lute & Company, (416)