Board Fails to Provide Meaningful Response
TORONTO, June 2 /CNW/ - The Concerned Shareholders of TriNorth Capital
Inc. (TSX:TRT) announced today that, since the filing of the Proxy Circular on
May 29, 2009, a significant number of fellow shareholders of the Company have
expressed their enthusiastic support for the campaign to replace the current
Board with five new directors who are committed to creating shareholder value.
On Friday, May 29, TriNorth Concerned Shareholder Tony Busseri announced
the nomination of new directors to replace the Board that has overseen a 90%
loss in value since June 30, 2008 and has undermined market confidence in the
Company through questionable corporate governance such as poor disclosure and
failure to provide material facts about related-party transactions. Most
recently, the Board has proposed further schemes that can be expected to
destroy shareholder value. These include a 1-for-10 share consolidation, and
forfeiting the value in the Company's senior TSX listing by transferring to
the TSX Venture Exchange.
The announcement of the campaign to replace the TriNorth Board, was
followed by an increase in the share price and volume which can be seen as the
result of pent-up frustration from shareholders who have suffered through
significant value destruction under the Current Board.
"We believed there were many shareholders who were dissatisfied, but we
have been amazed by the number who have contacted us and their level of anger
and disappointment with the Current Board," Mr. Busseri said. "They want to
protect what is left of their investment and are rallying behind the proposal
to replace the current Board. We are urging them to translate their support
into votes by using the yellow proxy today."
Mr. Busseri noted the Current Board's only response to date has been its
June 1 news release which actually only "refutes" claims that were never made
by the Concerned Shareholder circular and fails to address the significant
issues that were raised in the circular.
The fact is that on May 9, 2008, TriNorth announced it had earned a 50%
interest in a company with oil and gas concessions in Eastern Russia. The
Company noted that these two concessions prospective hydrocarbon resources,
together, had more than 3.3 trillion cubic feet of gas and 488 million barrels
The news release added: "Preliminary consent for land allotment for the
purposes of geological surveying, prospecting and hydrocarbon production has
been obtained for both concessions. It is currently the intention to engage in
exploration and development work on these two concessions and it is
anticipated that TriNorth will make an equity investment in the project to
fund this development."
This highly positive news release has been the only public disclosure
about the oil and gas concessions. While investors were provided with this
news release, they would have been more fully informed if TriNorth had also
- That the concessions were encumbered by debt;
- That this debt was in excess of $10 million;
- That this significant debt was current and about to go into default
resulting in a restructuring which almost eliminated TriNorth's
equity position in the concessions;
- That the debt was owed to Lawrence Partners Fund, an affiliate and
related party to Lawrence Asset Management Inc, which manages
TriNorth did not publicly disclose any of these facts until forcefully
questioned by the Concerned Shareholders.
The interest in the oil and gas concessions ended up in the portfolio of
Lawrence Partners Fund. TriNorth shareholders can only assume that their Board
provided proper oversight of this related party transaction and that it
received an independent fairness opinion. Neither of these essential corporate
governance processes were ever disclosed by the Company.
"The Board's response reveals that they have missed the point about the
oil and gas concessions," Mr. Busseri said. "They act as if it is simply an
accounting issue. It is not. It demonstrates that shareholders cannot trust
this Board to provide relevant information about their investments. Regular
and prompt access to that information is a fundamental right of shareholders."
Time is short. TriNorth shareholders should use the YELLOW proxy to vote
for the election of a new Board and to block the destructive management
resolutions. In order to be voted at the Annual Shareholder Meeting, proxies
must be received by no later than noon (Toronto time) on June 18, 2009. For
more information, call The Concerned TriNorth Shareholders at 905-334-5495 or
go to www.yourtrinorth.com.
The Concerned Shareholder Proxy Circular has been filed with securities
regulators and is being 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)