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September 17th, 2014 Meeting Postponed

Wednesday, 10 September 2014 12:32 PM

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Calgary, AB / ACCESSWIRE / September 10, 2014 / CRC Royalty Corporation ("CRC") announces that it has postponed until further notice the special meeting of shareholders that was to be held on September 17th, 2014.

The reasons for postponement are as follows:

1. Former management of CRC scheduled the Meeting for the sole purpose of having the CRC shareholders approve a Reorganization Agreement between CRC, Caledonian Royalty Corporation and 1843141 Alberta Ltd. At the time the Meeting was scheduled, that agreement did not exist. In fact, it was only on August 26th, 2014, just one day prior to their removal as directors, that former management caused CRC to enter into such an agreement. At the time they did so, all three companies were under common management, there were conflicts of interest between Caledonian and CRC of which former management was clearly aware, and former management knew or ought to have known that they were going to be removed as Directors of CRC at the Special Meeting of shareholders scheduled for the next day, as they had access to the proxy count at that time. 

2. CRC cannot legally proceed with a meeting on September 17 because former management did not mail out a Notice of Meeting and Information Circular for the proposed meeting within the time permitted by law, or at all. In fact, the mailing deadline for the special meeting was August 27, the day on which CRC shareholders voted to remove former management from office.

3. CRC's new management is of the view that the Reorganization Agreement fails to address numerous business issues that significantly impact CRC and its shareholders, and that, as written, that agreement could materially and adversely affect the legal and financial interests of CRC shareholders. In particular, there is nothing in the agreement that requires Caledonian to go public or that requires Caledonian to substitute distributions to the current CRC shareholders in place of the distributions currently being made to CRC and others as Royalty Unit holders. Simply put, CRC's new management is concerned that the transactions contemplated by the Reorganization Agreement may not be in the best interests of CRC or its shareholders, and questions the validity of that agreement.

4. No information has been provided by Caledonian to permit CRC to evaluate the potential benefits or potential negative impacts of the agreement on CRC and its shareholders. In particular, Caledonian has provided no valuation or other evidence to support the proposed 1:1 ratio for its proposed exchange of Caledonian shares for Royalty Units. As a result, it is not possible at this time for the management of CRC to make an informed decision or recommendation to the shareholders of CRC regarding the agreement.

5. An amalgamation of CRC with Caledonian is part of the Reorganization Agreement. CRC management is concerned that such an amalgamation may in fact eliminate many important and valuable rights currently held by CRC and its shareholders, including without limitation the right to receive royalty income. CRC requires additional information regarding Caledonian's position on such things as, for example, the damages suffered by CRC and its shareholders for Caledonian's breach of its July 5, 2013 covenant to complete a listing of Royalty Units on or prior to June 30, 2014.

CRC has requested that information from Caledonian as is necessary to make an informed decision and recommendation to its shareholders. However, such information has not been provided and CRC has now been informed that Caledonian, which apparently planned to hold a special meeting of its shareholders on September 17 to approve the Reorganization Agreement, has postponed that meeting for effectively the same reason – its inability to provide Royalty Unit holders with the information required to permit them to make a reasoned and informed decision.

At such time as CRC receives from Caledonian full, true and plain disclosure of all material facts relating to the proposed reorganization, and other information necessary to permit the directors of CRC to make a fully informed decision, management will determine whether to call a special meeting of the shareholders of CRC.

We thank you for your continued support and look forward to providing further updates and information to you as it becomes available. 

For further information contact Hugh Cartwright, Director at 604-684-5750.

CRC ROYALTY CORPORATION
"Hugh Cartwright"
Director

 

SOURCE: CRC Royalty Corporation  

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