Western Wind Energy (WND.V) announced it will launch a series of countersuits against Pacific Hydro Ltd. of Australia seeking compensation and damages in excess of $1 billion.
Western Wind reports:
Several days ago, Pacific Hydro commenced litigation against Western Wind, and threatened to seize, encumber, obstruct and convert major assets of Western Wind Energy. Without shareholder and other applicable approvals, such acts by an insider, related party and control person are serious contraventions of the Securities Act in Canada and the United States.
Pacific Hydro has sole voting control of all matters of Western Wind Energy and as of September 25, 2006, has exercised such voting control to the objections of management.
Pacific Hydro did not publicly announce its intentions to seize, convert, obstruct and/or encumber Western Wind Energy’s assets prior to Pacific Hydro issuing its own news release announcing its intention to sell securities of Western Wind Energy. Pacific Hydro had acquired by January 27, 2006, 6 million common shares of Western Wind Energy and 6 million share purchase warrants. Pacific Hydro owns approximately 25.2% of the issued capital of Western Wind Energy Corporation. As Western Wind Energy is a reporting issuer in both the United States and in Canada, Pacific Hydro is an insider, a related party and a control person.
At the September 25, 2006 annual general meeting of the shareholders of Western Wind Energy, all of the directors of Western Wind Energy voted in favor of the control resolution for the benefit of Pacific Hydro Limited however, the majority of the non-PHL shareholders voted against the resolution thereby limiting Pacific Hydro’s voting power from 25.2% to 19.99%.
Notwithstanding this resolution, Pacific Hydro was at that meeting, and remains, the largest single shareholder of Western Wind Energy. Pacific Hydro Limited with the effect to exercise its voting rights, had the complete control of every other voting item on the Agenda.
Specifically, Pacific Hydro’s 19.99% voting rights were greater than the sum total of all the other shareholders voting at the meeting, including management, whether by proxy or in person. For further certainty, Pacific Hydro voted down a resolution to modify the stock option incentive plan rewarding employees and consultants of the Company. Pacific Hydro demonstrated at the meeting and by those acts that it could vote down any measure, at its sole desire, even at 19.99%. By definition of the Securities Act in both Canada and the United States, Pacific Hydro is a control person of Western Wind Energy and is subject to all the rules and regulations that govern the conduct and actions of such control person(s).
Western Wind Energy currently produces energy from over 500 wind turbine generators located in Tehachapi and San Gorgonio Pass (Palm Springs), California. During the past two years, Western Wind Energy has executed or acquired over $1 billion of power sales agreements totaling 169.4 megawatts from the sale of wind energy electrical generation, to two separate utilities. Western Wind Energy was the first to execute a “wind” PPA in the State of Arizona, and in California, is expanding from management’s 25-year continuous operating history in the Tehachapi Pass.
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