Canada Bre X Ordered to Bankruptcy
CALGARY, Alberta (AP) _ A judge Wednesday approved a plan to place disgraced Bre-X Minerals Ltd. in bankruptcy, the latest indignity for a company that became entangled in the biggest gold-mining scam in history.
Judge Robert Cairns ordered Bre-X and its parent company, Bresea Resources Ltd., into bankruptcy, although he stayed the order for Bresea pending an appeal.
Bresea’s lawyer, Howard Gorman, argued that Bresea _ which owns 22 percent of Bre-X _ should be kept alive long enough to allow the company to call a shareholders meeting and appoint a new board of directors.
Brian O’Leary, who represents more than 100 Alberta shareholders, said Bresea should be bankrupted so his clients can win back some of the money they lost when Bre-X’s supposedly vast gold deposit in the Indonesian jungle turned out to be a fraud.
Investigators determined that Bre-X geologists secretly added gold from elsewhere to samples of rock dug up at the exploration site.
David Walsh, chairman and chief executive of both Bre-X and Bresea, had agreed to step down and to bankrupt Bre-X as part of a deal with lawyers representing investors.
Efforts by Bre-X shareholders to mount class-action suits are under way in British Columbia, Ontario, Quebec and Texas, where one large class action encompasses more than 20 different suits from across the United States, O’Leary said.