Peyto Exploration & Development Corp. Reports Threat of Class Action Lawsuit as
A Successor to New Open Range
CALGARY, ALBERTA -- (Marketwired) -- 09/20/13 -- Peyto Exploration &
Development Corp. ("Peyto") (TSX:PEY) reports that it has received
correspondence from a law firm representing two shareholders of
Poseidon Concepts Corp. ("Poseidon") advising that such counsel has
been instructed to finalize and file an application to seek leave of
the Alberta Court of Queen's Bench (the "Court") to pursue a class
action lawsuit against Peyto, as a successor to new Open Range Energy
Corp. ("New Open Range").
The proposed action contains various claims relating to alleged
misrepresentations in disclosure documents of Poseidon (not New Open
Range), which claims are also alleged in class action lawsuits filed
in February 2013 against Poseidon and certain of its current and
former directors and officers, and underwriters involved in a public
offering of common shares of Poseidon completed in February 2012.
Pursuant to a plan of arrangement announced on September 6, 2011 and
completed on November 1, 2011, Poseidon (formerly named Open Range
Energy Corp.) completed a corporate reorganization resulting in two
completely separate publicly-traded companies: Poseidon, which
continued to carry on the energy service and supply business; and New
Open Range, a corporation incorporated on September 14, 2011 for
purposes of participating in the arrangement, which carried on
Poseidon's former oil and gas exploration and production business.
Peyto acquired all of the issued and outstanding common shares of New
Open Range approximately one year later, on August 14, 2012. On April
9, 2013, Poseidon obtained creditor protection under the Companies'
Creditor Protection Act.
Among the allegations in the proposed class action are that New Open
Range (a separate and distinct legal entity from Poseidon) knowingly
influenced Poseidon, or persons acting on behalf of Poseidon, to
release certain disclosure documents which are alleged to include
misrepresentations, or influenced the directors or officers of
Poseidon to authorize, permit or acquiesce in such release. The
proposed class action seeks various declarations and damages
including compensatory damages which the plaintiffs estimate at
million and punitive damages which the plaintiffs estimate at $10
million, which damage amounts appear to be duplicative of damage
amounts claimed in the class actions against Poseidon, certain of its
current and former directors and officers, and underwriters involved
in a public offering of common shares of Poseidon completed in
The application seeking leave to pursue the proposed class action
against Peyto has not been filed. If the application is filed, Peyto
intends to vigorously oppose the application. Peyto believes the
claims against it (as successor to the newly formed New Open Range)
are unprecedented and are without merit. If, despite Peyto's
opposition, the application to pursue the proposed class action is
granted, the proposed class action still cannot proceed unless
certified by the Court. Such certification will also be strongly
opposed, as will all steps the plaintiffs may take to pursue such a
claim against Peyto. Peyto will continue to aggressively protect its
interests and the interests of its shareholders and will seek all
available legal remedies against the plaintiffs, including recovery
of all costs incurred by Peyto in defending the threatened action.
The Toronto Stock Exchange has neither approved nor disapproved the
information contained herein.
This press release contains forward-looking statements within the
meaning of applicable securities laws. The use of any of the words
"expect", "intends", "may", "will", "should", "believe" and similar
expressions are intended to identify forward-looking statements. In
particular, this press release contains forward-looking statements
relating to the proposed class action lawsuit against Peyto and
Peyto's belief that it is without merit and Peyto's intention to
defend itself. Forward-looking statements are based on a number of
material factors, expectations and assumptions of Peyto which have
been used to develop such statements but which may prove to be
incorrect. By their nature, forward-looking statements are subject to
numerous risks and uncertainties, some of which are beyond Peyto's
control. Readers are cautioned that the assumptions used in the
preparation of such information, although considered reasonable at
the time of preparation, may prove to be imprecise and, as such,
undue reliance should not be placed on forward-looking statements.
Peyto's actual results, performance or achievement could differ
materially from those expressed in, or implied by, these
forward-looking statements and, accordingly, no assurance can be
given that any of the events anticipated by the forward-looking
statements will transpire or occur, or if any of them do so, what
benefits that Peyto will derive therefrom. Additional information
regarding some of these risks, expectations and assumptions may be
found in Peyto's Annual Information Form and Management's Discussion
and Analysis prepared for the year ended December 31, 2012. The
forward-looking statements contained in this press release are made
as of the date hereof and Peyto undertakes no obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise, unless so required by
applicable securities laws.
Peyto Exploration & Development Corp.
President & Chief Executive Officer
(403) 451-4100 (FAX)
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