Corona sues to halt bid by Goldcorp

The legal action was commenced by subsidiary Corona Minerals, which is bidding for ownership of the two companies on behalf of its parent, against Dickenson, Kam- Kotia, Wharf Resources (TSE), CSA Management Ltd., Goldcorp Investments Ltd., their respective directors and RBC Dominion Securities, financial adviser to Dickenson and Kam-Kotia.

Goldcorp, a Toronto-based gold fund managed by CSA, is also bidding to take over Dickenson and Kam-Kotia.

Corona alleges in its lawsuit, among other matters, that:

— The offers made by Goldcorp for Dickenson and Kam-Kotia contravene the investment restrictions contained in the articles of incorporation of Goldcorp;

— The defendants have breached their statutory and fiduciary duties;

— Goldcorp failed to comply with certain provisions of securities laws;

— The reciprocal holdings among Dickenson, Kam-Kotia and Wharf were improperly used to assure Goldcorp control of Dickenson and Kam-Kotia; — The defendants acted jointly and in concert and conspired to cause economic harm to Corona Minerals and to entrench the directors of Dickenson and Kam-Kotia using unlawful means; and,

— The creation of the reciprocal holdings among Dickenson, Kam- Kotia and Wharf and the use thereof are unlawful.

Corona is seeking damages of $50 million and an order preventing Goldcorp or CSA or their associates from acquiring shares of Dickenson or Kam-Kotia, including purchases pursuant to the outstanding offers.

Goldcorp and its directors, in a press release, deny the allegations, which they say are without foundation.

Dickenson and Kam-Kotia have interlocking ownership, while Wharf, which operates a heap-leach gold mine in the United States, is controlled by Dickenson.

Corona has been offering $7.15 for each Dickenson B share and $2.50 for each Kam-Kotia common share. The offers expired April 4. (There was no word at presstime of an extension.)

Goldcorp, whose offers will expire April 14, is bidding $9 for each B share (worth 10 votes), $3 for each Kam-Kotia share and $8.50 for each Dickenson A share (worth one vote) up to 50% of the outstanding A shares.

Meanwhile, a Dickenson shareholder, Ronald White, a nephew of the former president of the company, has commenced legal proceedings in the Supreme Court of Ontario against Dickenson, Kam- Kotia, the directors of each company and six officers of Dickenson.

An interim injunction is scheduled to be heard May 1 restraining the defendants from implementing certain employment agreements entered into with the six officers should there be a change in corporate control.

An order is also being sought to prevent Dickenson and Kam-Kotia from voting any of their interlocking shareholdings to ratify the agreements.

The agreements with the six executives call for termination pay equal to three times annual salary and related benefits should a change of control and change of employment occur. Also, under an employee benefit plan, John Kachmar, Dickenson president, and R. E. Van Tassell, vice-president exploration, would become eligible for additional funds.

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