CRA Seeks Court Ordered Liquidation of JV and Toukhmanuk Gold Mine: Jersey Court Orders Trial To Commence On An Expedited Basis
Consolidated Resources is suing Global Gold Corp. (otcmarkets:GBGD) and Van Krikorian to recover $2 million in defaulted debt and force the sale of the Toukhmanuk Mine.
A significant amount of background on this issue can be found by reading the Judgment issued by the Royal Court of Jersey on September 11, 2014. (see links below).
Here is brief overview:
On April 27, 2011, Consolidated Resources Armenia (CRA) concluded a joint venture agreement with Global Gold Corp. (GBGD) for the development of the Toukhmanuk Gold Mine, called Global Gold Consolidated Resources (GGCRL). The JV received $5 million cash from CRA, and CRA received a 49% interest in the Toukhamnuk Gold Mine.
In 2012 CRA made an additional loan to the JV, which was guaranteed by GBGD, of approximately $1.5 million cash to support the project. On March 7, 2014, Van Krikorian, as Manager of the JV, called an illegal meeting of the shareholders and directors of the JV in attempt (1) pass fraudulent financial statements to create fake debts of $3.5 million dollars owed to GBGD by the JV, in an effort to offset the legally binding debts owed to CRA, (2) cancel the JV and (3) take back the assets of the Toukhmanuk Gold Mine illegally using the 51% control of the votes of the JV, even though such actions require agreement by CRA too.
To protect CRA's investment in the JV and recover their loans, CRA sued GBGD and Van Krikorian.
On the 10th of March, 2014, CRA obtained an ex parte interim injunctions against GCRL, GBGD and Van Krikorian, restraining the Joint Venture Company in any way from disposing of or encumbering or dealing with or diminishing the value of any of its assets whether they are in or outside of Jersey.
Mr. Van Krikorian and GBGD also filed a motion to have the case stopped and sent to NY Arbitration, claiming the JV agreement and Shareholders' agreement and Loan Agreement was covered by an Arbitration clause in the JV Agreement.
The Judge ruled that the case will not be stopped and the will be expedited.
Under Jersey Law, due to the deadlock between the parties on how the JV will continue, the Lawyers of CRA argued that the most likely outcome of the case will include a court ordered liquidation of the assets of the JV, which includes the Toukhmanuk Gold Mine.
Below is a list and links to the JUDGMENTS:
List of Court Cases as Published on Royal Court of Jersey Web Site:
Consolidated Resources Armenia
Global Gold Consolidated Resources Limited
Mr. Van Krikorian
Global Gold Corp
Judgement: JRC 132: Royal Court of Jersey: Samedi Division: June 18, 2014 http://www.jerseylaw.je/Judgments/UnreportedJudgments/Documents/Display.aspx?url=2014/14-06-18_Cons_Resources-v-Global_Gold_132.htm
Judgement: JRC 124: Royal Court of Jersey: Samedi Division: June 5, 2014 http://www.jerseylaw.je/Judgments/UnreportedJudgments/Documents/Display.aspx?url=2014/14-06-05_Consolidated_Resources-v-Global_Gold_and_Others_124.htm