A group of shareholders in a bankrupt company who filed a potential class-action lawsuit in Toronto against Brookfield Asset Management Inc. after their investments were wiped out will now have to pursue the case in Alberta.
Lawyers for a group of shareholders in Calgary-based Birch Mountain Resources Ltd., which went into receivership in 2008 after it defaulted on a debenture held by a Brookfield subsidiary, told a three-judge panel of the Ontario Court of Appeal that their case should be heard in Ontario. Key witnesses are located in Toronto, lawyer John McDonald argued.
But the court, without asking to hear from Brookfield's lawyer, upheld a lower court ruling on Wednesday that the matter should instead be heard in Alberta. The shareholders' group says it now plans to pursue its case there. The lawsuit must still be certified by a judge as a class action. Its claims have not been proven in court.
The lawsuit alleges that Brookfield used "oppressive" tactics to force Birch Mountain into receivership and allow a Brookfield entity to emerge with Birch Mountain's limestone quarry, which is worth an estimated $1.6-billion and located in the middle of the oil sands.