Former Canadian 88 CEO Sued for Takeover Attempt
Greg Noval, who founded and ran Canadian 88 Energy Corp. for 14 years only to be ousted last year when Duke Energy Corp. bought a 20% stake in the company, now faces not only being kicked off the board of directors but also a C$150 million lawsuit filed against him by Canadian 88, which alleges Noval breached his fiduciary duties as a director for attempting a hostile takeover. The lawsuit seeks C$140 million in damages for Noval's breach of fiduciary duty and C$10 million in general damages.
Now CEO of Calgary cross-town rival Canadian Superior, Noval, who also happened to be the largest private shareholder of 88, attempted the takeover of his former company in April, finally abandoning the efforts in June (see NGI, April 30; May 14). In a statement last week, Canadian Superior claimed the lawsuit was another attempt to discredit Noval and turn attention away from Canadian 88's "mismanagement."
"Mr. Noval has worked tirelessly at great personal sacrifice and expense in the best interests of all shareholders to grow Canadian 88 into a several hundred million dollar enterprise endeavoring at all times to maximize value for Canadian 88 shareholders," read the statement. Noval remained on Canadian 88's board of directors until late June, and the war of words appeared to have ended until the lawsuit.
According to Canadian 88's statement of claim, Noval is accused of using private information for the advantage of Canadian Superior. "Noval frequently asserted both personal claims and claims on behalf of Canadian Superior to working interests and other proprietary interest in Canadian 88's oil and gas properties and assets," according to the lawsuit. It also accuses the former CEO of dousing Canadian 88's stock price and preventing the company from finding a suitable buyer earlier this year. "Canadian 88 suffered a reduction in its ability to finance and offer its shares at a fair value and to utilize the capital markets in a most favorable manner," reads the lawsuit.
Canadian Superior, which said the "claim is an oppressive action," responded that Noval, "as a large shareholder of Canadian 88, is concerned that the management and directors of Canadian 88 are continuing on a process that, if not corrected, will further erode value for all shareholders of Canadian 88."
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