Gold Reserve Inc. v. Rusoro Mining Ltd., [2009] CanLII 4855, O.J. No. 533

In a decision released on February 10, 2009, Justice Peter Cumming of the Ontario Superior Court of Justice (Commercial List) granted an interlocutory injunction restraining Rusoro Mining Ltd. (TSXV: RML) from proceeding with its hostile takeover bid for Gold Reserve Inc. (TSX: GRZ), a Spokane, Washington based public company, because of alleged conflicts of interest and confidentiality violations. Justice Peter Cumming's decision, which the Financial Post described as a "spanking" for Rusoro Mining, also banned Rusoro's financial advisor, Endeavour Financial Corp., a Grand Cayman incorporated company, from having any role in a future hostile takeover bid for Gold Reserve. Endeavour had previously served as Gold Reserve's advisor. On April 7, 2009, Justice Denise Bellamy of the Ontario Superior Court of Justice dismissed motions for leave to appeal by Rusoro Mining and Endeavour Financial. These decisions have been described as a real victory for public shareholders and an important Canadian M&A precedent. The decisions also impact on the need for financial advisors to respect client confidentiality and to ensure that appropriate steps are taken to protect sensitive client information when conflicts of interest emerge. "These two decisions are particularly significant because they underscore the importance of following a proper take-over process with due respect for the legitimate proprietary and confidentiality concerns of target companies", explained Robert S. Harrison, partner at Fasken Martineau. Fasken Martineau represented Gold Reserve in the Ontario Superior Court of Justice, with Robert Harrison leading the litigation team, which also included Berkley Sells, Murray Braithwaite and Shelley Babin. Jon Levin and Chuck Higgins led the corporate team which provided corporate and securities law advice to Gold Reserve. Gold Reserve is a Canadian mining company based in Spokane, Washington and listed on the Toronto Stock Exchange, which holds the rights to the Brisas gold/copper project and the Choco 5 gold exploration property in Bolivar State, Venezuela. Gold Reserve Inc. v. Rusoro Mining Ltd., [2009] CanLII 4855, O.J. No. 533