Widow of geologist Michael J. Fitzgerald wins litigation and clears her late husband’s name

Over the course of 16 years, court after court unequivocally cleared Mr. Fitzgerald of accusations that he acted improperly in staking mining claims. — Photo courtesy CKNW website

VANCOUVER, Jan. 12, 2016 /CNW/ - Marisa Fitzgerald, widow of noted geologist Michael J. Fitzgerald, believes the collection proceedings currently wrapping up in the Supreme Court of British Columbia will signal the end of a 16-year legal saga involving court cases brought or instigated by Vancouver-based mining exploration company Mountainstar Gold Inc. against her late husband and his estate.

Over the course of 16 years, court after court unequivocally cleared Mr. Fitzgerald of accusations that he acted improperly in staking mining claims that eventually resulted in the discovery of one of the world's richest gold deposits, Barrick's Goldstrike property in Nevada.

"There is no doubt whatsoever that Mike has been cleared of any improper actions," says Mrs. Fitzgerald. "Judge after judge has repeatedly rejected Mountainstar's allegations and ruled in favour of Mike."

She adds that Mountainstar made several announcements touting the financial gains they expected from the lawsuits.

"They failed in those and they have also failed to pay what the courts ordered against them for costs."

The current action in the B.C. Supreme Court has been brought by the Fitzgerald Trust against Mountainstar seeking to enforce U.S. court-ordered judgments for legal costs.

U.S. courts held that the continuing legal actions brought by Brent Johnson as President of Mountainstar Gold Inc. were vexatious and brought in bad faith.

According to court documents, a claim by Mountain-West Resources in the B.C. Supreme Court in 1999 was based on events that occurred nearly 25 years previously in 1975 when Mr. Fitzgerald was president of Cobre Exploration Ltd. Cobre later changed its name to Mountain-West Resources Inc., and is now known as Mountainstar Gold Inc.

Cobre was a small Vancouver Stock Exchange-listed exploration company that had run out of money and was essentially dormant. The company could not pay Mr. Fitzgerald and he was forced to look for other opportunities to earn a living. In fact, according to evidence in court, Cobre encouraged him to do so.

In July 1975 Mr. Fitzgerald became part of a syndicate to prospect for precious metals in Nevada. Mr. Fitzgerald eventually staked a number of claims for the syndicate, subject to a net carried interest that was part of the compensation for his services. The syndicate was formed and financed separately from Mountainstar. In the late 1980's further work on the property resulted in it being developed into a mine. The net carried interest that Mike Fitzgerald had earned became valuable as a result.

In 1999, when Mr. Fitzgerald retired from Mountainstar, the company's new management, headed by Mr. Johnson, sued Mr. Fitzgerald alleging that he had breached fiduciary duties by working with the Nevada syndicate on his own behalf.

Mountainstar pursued and instigated claims in courts in British Columbia, Nevada, Arizona, Wyoming and Washington State. In every case, including appeals to higher courts, the claims were rejected.

In 2005, the B.C. Court of Appeal found that Mountainstar's claims suffered from a "fatal weakness" – there was "no evidence" to support them. Yet Mountainstar went on to sue after that directly and indirectly, in the US where courts ruled time and again that the company had made "meritless" claims first against Mr. Fitzgerald and later against his estate. Mountainstar alleged at one point that the claims made in the US courts were worth $1.65 billion. US courts held that actions brought by Mr. Johnson, on behalf of Mountainstar were vexatious and brought in bad faith.

On November 10, 2015, the Fitzgerald Trust filed a complaint with the British Columbia Securities Commission calling for an investigation into the litigation, Mountainstar and Mr. Johnson's involvement in it.

"I hope that those involved in making false and unsubstantiated allegations against Mike will be held accountable," says Mrs. Fitzgerald.

Copies of judgments and court orders are available on request.

SOURCE: Fitzgerald Trust