Perpetual Energy Inc. (“Perpetual” or the “Company”) is pleased to announce that the Alberta Court of Queen’s Bench (the “Court”) has dismissed and struck all but one of the claims filed by PriceWaterhouseCoopers Inc. LIT (“PWC”), in its capacity as trustee in bankruptcy of Sequoia Resources Corp. (“Sequoia”) against Perpetual and Sue Riddell Rose, the Company’s President and Chief Executive Officer (“Ms. Rose”). These claims relate to a transaction that involved the sale by Perpetual of legacy shallow gas properties in October 2016 to an arm’s length third party purchaser after an extensive and lengthy marketing, due diligence and negotiation process.
Consistent with the position advanced from the outset by Perpetual and Ms. Rose, the Court ruled in favour of Perpetual and Ms. Rose and struck PWC’s oppression claim and claim for relief on the grounds of public policy, statutory illegality and equitable rescission. The Court also stated that no claim could be made personally against Ms. Rose in any manner whatsoever. Moreover, the Court reiterated that at all times Ms. Rose appropriately discharged her fiduciary duties in connection with this transaction.
Despite referring several times to this transaction as one of “arm’s length” in the decision, the Court did not find that the test for summary dismissal relating to whether the transaction was an arm’s length transfer for purposes of section 96(1) of the Bankruptcy and Insolvency Act (the “BIA”) was met, on the balance of probabilities. Accordingly, the BIA claim was not dismissed or struck and only that part of the claim can continue against Perpetual only. Notwithstanding that one of the claims remains, Perpetual continues to be of the view that the claim is completely opportunistic by PWC and entirely without merit and will continue to vigorously defend itself against it. The Company remains highly confident that it will be completely successful in defending this outstanding part of the claim and is evaluating all of its options in this regard including a potential appeal and seeking substantial costs against PWC.
The transcript of this decision and the written reasons for the decision, when issued, will be posted to the Company’s website at www.perpetualenergyinc.com once available from the Court. Further information can be obtained by reviewing the public court documents that pertain to the action number 1801-10960, as filed with the Court, Calgary Judicial Centre.
Perpetual is an oil and natural gas exploration, production and marketing company headquartered in Calgary, Alberta. Perpetual operates a diversified asset portfolio, including liquids-rich natural gas assets in the deep basin of west central Alberta, heavy oil and shallow natural gas in eastern Alberta, with longer term opportunities through undeveloped oil sands leases in northern Alberta. Additional information on Perpetual can be accessed at www.sedar.com or from the Corporation’s website at www.perpetualenergyinc.com.
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