TORONTO, Nov. 24 /CNW/ - Kim Orr Barristers P.C. has filed a $220 million class action on behalf of investors of Western Coal Corporation ("Western Coal"), a publicly traded company listed on the Toronto Stock Exchange (symbol WTN). In addition to Western Coal, certain executives of Western Coal are also named as defendants, including President and Chief Executive Officer John W. Hogg. The class action alleges that Western Coal and some of its executives violated several securities laws and misled investors for personal financial gain.
In November 2007, Western Coal was carrying on its traditional business of the acquisition, exploration and development of coal licenses. At that time, its common shares were trading between $1.40 and $2.40.
On November 14, 2007, the company released its financial results for the second quarter of 2007. The news release also contained forward looking statements including that the company did not expect to have sufficient funds in the near term to meet its financial obligations as they became due, citing as causes current coal prices and the Canadian/US dollar exchange rate. As a result, shares of Western Coal plunged from a high of $1.75 on November 14 to a low of $0.47 on the following day.
Seven days later, on November 22, 2007 Western Coal issued a news release announcing that it had entered into a financing agreement with Audley European Opportunities Fund, ("Audley") an investment fund which held approximately 29 per cent of Cambrian Mining PLC during the Class Period ("Cambrian"). Cambrian held approximately 42 per cent of Western Coal during the Class Period.
From November 14, 2007 when the second quarter results were released to November 22, 2007 when the company announced that a financing agreement with Audley was in place, company insiders purchased 111,000 shares of Western Coal.
The Statement of Claim in the class action alleges that the defendants knew or ought to have known that releasing negative, forward looking statements about the company's financial viability would depress the share price of Western Coal. Given the pre-existing relationship with Audley, the Defendants knew or ought to have known at the time of the November 14, 2007 announcement that Western Coal was going to obtain the financing from Audley, which would allow them to meet their financial obligations. The suit alleges that the Defendants issued the November 14, 2007 warning to artificially deflate Western Coal's share price.
The proposed representative plaintiff, Wayne Gould of Alberta, was struck by the timing of the announcements. "I am very pleased to be representing the shareholders who have suffered unnecessary losses in this matter. I knew that something was not right when Western Canadian Coal essentially announced pending bankruptcy and then days later announced $40,000,000 in funding. This financing would seem to be impossible to accomplish in such a short period of time. I encourage all other Western Canadian Coal investors to join our claim."
The class action is being brought on behalf of all investors who acquired or sold Western Coal's shares between November 14, 2007 up to and including December 10, 2007.
SOURCE KIM ORR BARRISTERS
For further information: For further information: regarding this lawsuit, please contact Megan B. McPhee of Kim Orr Barristers P.C. at (416) 349-6574 or firstname.lastname@example.org