Seven Mile High rejects Hamelin offer

Shareholders of Seven Mile High Group (VSE) rejected an unusual offer by former president Maurice Hamelin to drop his $1.3 million lawsuit against the company on the condition they elect a board of directors he could “live with.” Hamelin and several associates were ousted from the company earlier this year after disgruntled shareholders launched an investigation into the company’s affairs. Hamelin and two associates are scheduled to appear before the British Columbia Securities Commission early next year to face allegations they committed a number of serious securities violations, including misappropriation of funds and misrepresentation of the company’s affairs.

Hamelin’s lawyer proposed three new nominees to the 5-person board at the company’s recent meeting in Vancouver. The nominees (which included Hamelin’s lawyer) were rejected in favor of the company’s current board of directors led by President Clark Gilmour.

Hamelin’s offer to drop his claim for $1.3 million in damages if his three nominees were elected (thereby securing control of the board) raised more than a few eyebrows at the meeting.

Seven Mile High has already been served with Hamelin’s statement of claim which is believed to be based on his employment agreement with the company. Seven Mile said the claim is “without merit” and it intends to file a defence and counterclaim. Along with efforts to rebuild the company, the current management team is also attempting to recover debts owed to the company by Hamelin and several of his associates.

Seven Mile’s key asset is a 40% interest in the Vault gold property near Vernon, B.C., which is being explored by a unit of Inco (TSE).