Baby off board? MGX Minerals (MXG.C) CEO announced as fired, then not, as board splits

Fairmont Hotel gadfly and resource exploring ‘man about town’ Jared Lazerson, otherwise known as the CEO of MGX Minerals (MXG.C), put out a hasty news release this afternoon suggesting news of his termination had been greatly exaggerated.

At 4:30 eastern, this hit the wires:

MGX MINERALS ANNOUNCES MANAGEMENT REALIGNMENT

MGX Minerals Inc. has provided the following corporate update. A majority of the board of directors, not including Jared Lazerson who has a disclosable interest in the matter and a requirement to abstain, has approved the immediate termination of Mr. Lazerson as chief executive officer and president of MGX.

A little over three hours later, out came a correction:

MGX MINERALS ISSUES CLARIFICATION: JARED LAZERSON REMAINS CEO

Oh dear.

MGX Minerals Inc. has issued a clarification regarding an unauthorized news release e-mailed to and published on the Stockwatch financial news website earlier today.

At a meeting of the directors held on Oct. 7, 2019, two directors of MGX Minerals, Lyndon Patrick and Michael Reimann, attempted to move a resolution to remove Mr. Lazerson as chief executive officer. That motion was ruled out of order by the meeting chair due to procedural irregularities.

In addition, the motion was defeated by a vote of 3-2, with Mr. Patrick and Mr. Reimann voting in favour of the resolution, and Mr. Lazerson and the fourth director, Andris Kikauka, voting against the resolution.

Pursuant to the company’s articles, Mr. Lazerson exercised the casting vote as the meeting chair.

Casting the deciding vote not to fire yourself is not exactly the sort of vote of confidence a pubco CEO likes to be waving about.

But it appears this board is pretty much broken, with further detail suggesting this could get dragged out in the courts.

The directors were advised during the meeting by the company’s legal counsel that neither the company’s articles nor the B.C. Business Corporations Act necessarily prohibited Mr. Lazerson from voting on the resolution to remove him as CEO.

Mr. Patrick and Mr. Reimann left the meeting of directors shortly after the motion to remove Mr. Lazerson was defeated, and prior to the business of the meeting being completed.

Lazerson says the pair were advised they did not have permission to put out a news release for the company, but did anyway.

Lazerson has been under some fire recently, with his stock slumping for much of the past two years, and an ongoing flap with his former security providers.

The CEO had been in the company of an around the clock security escort and driver for several months after being allegedly bonked on the noggin in a targeted restroom assault. The attack left the exec with visible injuries.

The company providing that security was told it was no loner required, abruptly, early this year, a move the company says comes with contract breaking costs attached. They’re seeking $176,000 to make things right.

Stockwatch:

In addition, Lions Gate [Security] is seeking the return of furniture that it kept at Mr. Lazerson’s residence. According to the suit, Lions Gate had to keep a “tactical office” in the house. (From the description, the office appears to have been more of a lounge. The items Lions Gate is seeking include a couch, microwave, fridge, coffee maker, table and two chairs.) Lions Gate says Mr. Lazerson has refused to hand over the contents of the office, despite demands.

It is not known whether the security issue and the move to fire the CEO are linked, but neither will leave shareholders happy.

Lazerson says he’ll call a meeting of shareholders shortly.

Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.

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