Fate of syndicate formed in 1927 clouds Holloway ownership picture

Members of a 64-year-old syndicate are beginning to crawl out of the woodwork as the value of the Teddy Bear Valley Mines’ (CDN) 18-claim property near Matheson, Ont., becomes apparent.

The Teddy Bear Valley Syndicate, formed in 1927 to develop the claims, is believed to hold a controlling interest in Teddy Bear and therefore a significant share of the potentially minable Lightning zone. The deposit hosts reserves of 5.5 million tons grading 0.25 oz. per ton. About 40% of the tonnage, and most of the potential for additional reserves, lies on Teddy Bear ground.

Over the years, Teddy Bear has lost track of many of the syndicate unitholders and their heirs. In 1984, the company’s shares were consolidated on a 1-for-25,000 basis. Today, Chairman Ross Hofmann, with 1.8 million shares, holds the control block of the junior company.

Paul Zyla, a former Teddy Bear director, has initiated legal proceedings against Ross Hofmann and Teddy Bear, alleging that the 1984 reorganization involved “an improper and invalid transfer” of shares from the syndicate to Hofmann. Zyla argues that the syndicate units should be handed over to a public trustee if the owners, or their heirs, cannot be found. At the same time, the Ontario Securities Commission has been investigating the share consolidation.

Recently, Hofmann, as the syndicate’s acting manager, called an Oct. 17 unitholders’ meeting “for the purpose of considering various items relating to the reorganization of the syndicate.” For reasons unknown, the meeting has been cancelled. Hofmann’s legal counsel refused to comment, except to say: “Nobody knows who’s on first and what’s on second, and until that is resolved, the question of who controls Teddy Bear is up in the air.”