Fipke sues to stop sale of Ekati without revised offers

by eyetee | January 17, 2013 3:18 pm

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Chuck Fipke, the man who discovered what would later become the Ekati Diamond Mine, has filed a lawsuit that is putting the brakes on its sale for now.

According to Harry Winston Diamond Corp., papers have been filed in the Ontario Superior Court of Justice against Harry Winston Diamond Mines and BHP Billiton and their affiliates, as well as Stewart Blusson and Archon Minerals Ltd.

The claim alleges the offers made by BHP Billiton to C. Fipke Holdings Ltd. (Fipco) do not comply with its pre-emptive rights under the joint venture agreements for the Ekati mine, and that Harry Winston was complicit in this alleged non-compliance. Fipke also alleges that Harry Winston’s debt financing arrangements for the acquisition have interfered with its own ability to arrange financing. 

Harry Winston agreed last November to purchase BHP Billiton’s 80 per cent stake in the core zone joint venture and its 58.8 per cent interest in the buffer zone joint venture.

Blusson co-discovered Ekati with Fipke. Each holds a 10 per cent interest in the mine.

“[Harry Winston] and BHP Billiton believe the claim by Fipco is entirely without merit, and intend to vigorously defend the action in order to proceed with the purchase and sale of the Ekati mine,” the company said in a press release.

“The parties are continuing with the regulatory approval process, and [Harry Winston] expects to be in a position to complete the transaction following resolution of the litigation.”

The sales agreement between BHP and Harry Winston required Fipco, Blusson, and Archon be offered first right of refusal, with a 60-day window in which to exercise those rights.

The claim seeks a court order to stop the sale unless and until BHP provides Fipco with revised offers. Blusson and Archon have not issued a claim against BHP or Harry Winston, and have advised they do not intend to do so.

All parties have agreed that a final ruling come down no later than April 15. If the ruling is in favour of BHP and Harry Winston, the agreement states the sale is finalized before May 15 without re-triggering the pre-emptive right provisions of the joint venture agreements.

Source URL: https://www.jewellerybusiness.com/news/fipke-sues-to-stop-sale-of-ekati-without-revised-offers/

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