MEC Resources learns hell hath no fury like a director scorned
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Energy investor MEC Resources is facing demands from a former managing director over $1 million in allegedly unpaid loans.
On Monday creditor Grandbridge Limited, a listed investment company controlled by former managing director David Breeze, issued demand notices for $451,876 in outstanding loans to MEC and three of its subsidiaries.
Grandbridge has an investment in one of those subsidiaries, Advent Energy.
The loans were allegedly due on June 30.
On the same day BPH Energy — another Grandbridge and MEC investment company — reiterated its demand for $390,230 from MEC and Advent, and reminded the market it is counter-suing MEC for $388,050.
MEC (ASX:MMR) is suing BPH for $270,000.
Mr Breeze is an original MEC director from the company’s 2006 listing.
In November MEC terminated his contract as managing director and ended a services agreement with his company, Trandcorp.
A public battle began in December, when Mr Breeze tried to use the Corporations Act to get rid of the board. The resolutions were ruled invalid by the directors, and 57 per cent of MEC shareholders rejected Mr Breeze’s three proposed directors at an AGM in February.
Another meeting in March had a similar outcome.
Mr Breeze tried again in April after MEC announced a $2.8 rights issue, taking MEC to the Takeovers Panel alleging the non-underwritten rights issue was structured to maximise a shortfall in takeup; diluted the combined Breeze-Grandbridge-Trandcorp stake of 12.67 per cent; and didn’t give all shareholders equal access to the issue.
MEC promised to allocate shortfall applications equally among shareholders, and the Takeovers Panel washed its hands of the matter.
The recent debt demands began in July, and do not appear to be winding down.
MEC made a $1 million loss this year, with cash holdings of $600,000. It closed Monday at 2.4c, at the bottom of its 2c to 4c 52-week trading range.