After nearly two decades, an Ontario court has dismissed two lawsuits involving investors who lost millions of dollars in the Bre-X Minerals scandal back in the 1990s.
In a ruling Wednesday, Ontario Superior Justice Paul Perrell wrote that the actions were being dismissed because there was "no reasonable prospect of recovery from any of the defendants, even if the outstanding actions were successful."
The motions, which were brought forward by lawyers for the plaintiffs, were based on allegations that the now-defunct Calgary-based company engaged in "stock fraud" when it erroneously reported it had found a major gold deposit in Indonesia. It was later revealed that this was untrue, resulting in investors losing an estimated $1 billion.
Lawyers Paul Pape and Harvey Strosberg wrote in their motion that most of the money linked to the former company their clients were pursuing had been held in the Cayman Islands and "has been dissipated for living expenses and legal expenses."
Pape and Strosberg also requested that $3.5 million held by trustees and owed to the lawsuit claimants should be donated to charity because, if redistributed, would only mean a recovery of two cents on the dollar for each claimant after fees.
Justice Perrell ruled that the majority of the award will go to the national Access to Justice Fund, with the remainder to go to the Telfer School of Management at the University of Ottawa.
Bre-X had claimed a massive gold find in Indonesia in 1996, making millionaires of its early investors. The company closed down a year later, after the death of chief geologist Mike de Guzman and an independent assessment that said the purported gold find was non-existent.