Canadian Judge Clears Way for Bre-X Lawsuit

Hundreds of Canadian investors will get the first opportunity to sue for millions of dollars in losses taken as a result of the infamous Bre-X Minerals Ltd. gold scandal after a judge lifted restrictions to launching a lawsuit. Alberta Judge Robert Cairns granted a request from a lawyer representing nearly 900 individual shareholders from across Canada to remove a ban on legal action while Calgary-based Bre-X was under Canadian bankruptcy protection. The lawyer, Harvey Stosberg, called the move a “watershed” event that would kick-start the process for recovering at least some of the $4.3 billion in equity erased when Bre-X’s Busang gold property in Indonesia was found to be a massive fraud. The shareholder group is just one of several in Canada and the United States planning to sue Bre-X, its management, directors, financial advisors and engineering consultants for losses they took as a result of the scandal, considered to be the world’s biggest-ever mining swindle. During the hearing, Bre-X lawyer Howard Gorman argued that a lawsuit should not be allowed because shareholders were simply trying to get their money back, not necessarily act in the best interest of the company, which has been under bankruptcy protection since May 8.