Lanny McDonald's investor group goes another round with Brookfield Asset Management

A group of investors led by former hockey great LannyMcDonald will face off with corporate heavyweight Brookfield AssetManagement Inc. in the Alberta Court of Appeal.

The two sides are at odds over how a company called BirchMountain Resourceswent under in 2008, and how its $1.6 billionlimestone quarry in the heart of Alberta's oilsands ended up inBrookfield's hands for less than $50 million.

McDonald and his co-plaintiffs allege in court documents thatBrookfield subsidiaries used "misleading," "usurious" and
"oppressive" actions to gain control of the company and itsquarry.

Brookfield said the accusations are "meritless, frivolous and anabuse of process" in court filings.

Last year a Calgary judge agreed, dismissing the case and rulingthat there was no merit to the claim.

New evidence

Now McDonaldwho became an independent director and shareholderof Birch Mountain following his storied NHL career with the TorontoMaple Leafs, Colorado Rockies and Calgary Flameswill be back incourt armed with new evidence as his legal team tries to launch anappeal.

McDonald could not be reached for comment.

For John Mazag, a Birch Mountain shareholder who had investedmost of his savings and then lost it all when the company wentbankrupt, the appeal is important both financially and for theprinciple at stake.

"To me this is another story about corporate greed," said Mazag.

He said he was hopeful when Brookfield subsidiary Tricap PartnersLtd. agreed to invest in Birch Mountain because it had the deeppockets to help fund the hundreds of millions of dollars needed toput the quarry into full production.

"I was excited about Brookfield coming on board because I knewthey had the financial wherewithal to help us through," said Mazag.

Brookfield declines comment

But that opinion changed as the company called in its loan lessthan a year after first lending $31.5 million to the company.

"Brookfield wants you to think they're a value investor, butfrom a shareholder standpoint, I think Brookfield uses more
predatory lending practices," said Mazag.

Brookfield, which declined to comment, said in court filings thatBirch Mountain defaulted on loan provisions several times in 2008,was losing moneyand was failing to meet production targets.By November 2008, Tricap called in its loan that was secured byall of Birch Mountain's property, and eventually took control of thequarry.

The plaintiffs say Tricap didn't act in good faith, whileBrookfield said Tricap met all obligations under the loan agreement.

A Calgary appeal judge will hear arguments Wednesday on whether thecase should go any further.