Special Shareholder Meeting
February 14, 2017
Agenda & Information will be available soon
News & Information
On December 23, 2016 BitRush director Karsten Arend announced (allegedly on behalf of the board) that a motion has been scheduled for January 4, 2017 (read more here). Without any further guidance for the interested reader and/or shareholder the announcement said that the motion has been filed at the Ontario Superior Court of Justice – Commercial List seeking the following:
- An interim Order that Werner Boehm deliver or cause to be delivered forthwith to BitRush the corporate assets and property of BitRush and its subsidiaries that continue to be within his possession or control; and
- An interim Order that Werner Boehm cease dealing with BitRush’s assets, communicating with BitRush’s customers, or holding himself out as an officer of BitRush or its subsidiaries
Although there have already been 2 scheduled court meetings since then (Jan 4 and Jan 10, 2017) BitRush Corp has not informed its shareholders about the outcome of those court meetings regarding the application and the motion. Well, here is the update!
In short – the court has not issued any interim Orders and scheduled a hearing for the application of Karsten Arend, Hans-Joerg Wagner and BitRush Corp for March 20, 2017. Furthermore, MezzaCap filed a motion to transfer the case from Toronto to Vienna. This motion will be heard on February 20, 2017. MezzaCap and most of its fellow shareholders are convinced that Vienna is the right place to handle this shareholder dispute between the shareholders around Igor Wollner and MezzaCap.
Both hearings have been scheduled for dates beyond the Special Shareholder Meeting. The judges at the Ontario Superior Court have obviously not been convinced by the arguments of Karsten Arend, Hans-Joerg Wagner et al.
MezzaCap Investments Ltd as majority shareholder of BitRush is faced with legal proceedings from BitRush Corp and its directors Karsten Arend and Hans-Joerg Wagner. Those proceedings have been initiated by the minority shareholders around the Slovakian family of Igor Wollner and his Singapore investment vehicle HSRC. The BitRush director Hans-Joerg Wagner has been a close friend of Igor Wollner for many years. They are so close that, If you ask the director and board member Wagner about any decision regarding BitRush, his default answer is “I’ll discuss this with Igor“.
Actually, the legal dispute between the BitRush directors Karsten Arend, Hans-Joerg Wagner AND BitRush Corp itself on the one side and MezzaCap and its people on the other side is financed by Igor Wollner. Quite interesting, right? The minority shareholder Igor Wollner is paying a Toronto lawyer to take legal actions against the majority shareholder on behalf of 2 directors of BitRush Corp and BitRush Corp itself. Seems a bit odd? It is!
But the real interesting thing is that Igor Wollner invests some CAD 100,000 (according to Peter Lukesch, the former BitRush CEO who obviously teamed up with the Wollner family) into a legal dispute with the major shareholder (on behalf of BitRush Corp) but BitRush Corp itself doesn’t pay its liabilities. Neither do the directors Arend and Wagner care about the BitRush business. They don’t care about BitRush customers, either! No Support, no Helpdesk, nothing! How comes? Hmmm, maybe they are running out of money and/or lost the focus?
Beginning December 2016 the directors Arend and Wagner carelessly terminated crucial service agreements with immediate effect without checking any possible issues that could have arised with these terminations. It turned out then, that BitRush is no longer capable of running its business without those service agreements (Support, Helpdesk, Forum, Clearing etc). Could you even imagine an online company without support and helpdesk? No one cares now about the customers and their issues, not important enough, obviously! Maybe they should have talked with the CEO before terminating the contracts? Ups, was not possible anymore because they terminated (or tried to) the CEO too! Sounds like an efficient plan to crash a company, right?
Furthermore, the termination fees significantly increased the BitRush liabilities. Result: No services, exploded expenses, angry customers and BitRush now owes money to several critical suppliers and partners but doesn’t pay them. Instead, BitRush invests money into legal proceedings on request of a minority shareholder. Maybe, Arend and Wagner should have taken the money they invest into their odd legal actions and pay the suppliers, partners and customers instead to keep the business running. Why didn’t they? Because Igor Wollner ordered it exactly that way! So, if you are one of the suppliers, partners or customers you now know who to contact to fix your issue [igor at wollner.sk].
Well, dear fellow shareholders! I think we have to decide about the actions against the directors in our Special Shareholder Meeting anyway. The damage they already caused is substantial and possibly non-recoverable. And this all just because a Slovakian guy wants to raid a public Canadian company!
MezzaCap entered into a shareholder agreement with the Slovakian Wollner Family back in February 2016. Under this agreement MezzaCap granted an option to the Wollner Family to buy up to 18 Million shares of BitRush Corp for CAD 1,00 (One Canadian Dollar) in exchange for their commitment to actively support the development of the corporation in the very best interest of all shareholders. The BitRush share price has been CAD 0.1 back then, i.e. the option has been worth CAD 1.5 Million. Given this extraordinary generous package it was clear that MezzaCap expected extraordinary value from the Wollner Family and their Singapore investment vehicle HSRC Invest.
Unfortunately it turned out that neither the Wollner Family nor HSRC delivered any substantial added value that could have justified the CAD 1.5 Million option package even though MezzaCap already delivered 12 Million shares until end of October 2016. When asked about their added value to BitRush Corp HSRC director Hans-Joerg Wagner argues that Sven and Chris Wollner have successfully set up the gaming portal WaggaWagga and they, too, delivered a technical description of BitRush’s payment system ANOON (see application Court File No CV-16-11653-00CL). Isn’t this worth CAD 1.5 Million?
Actually this is pointless anyway. Wagner obviously forgot that BitRush had to pay for the WaggaWagga gaming portal as this project was done by Slovakian service providers in a business as usual approach. Additionally, HSRC had a consulting agreement with BitRush Corp and charged all their services to BitRush Corp. Wagner forgot to mention those circumstances in the application and painted a completely different (and false) picture to the judge.
Well then, as BitRush has been charged for all the services that have been mentioned by Wagner, those services, by definition, cannot be part of services delivered to MezzaCap and/or BitRush Corp in exchange for the payment of 12 Million shares, right? This double counting does neither make sense to MezzaCap nor to BitRush and its shareholders. On the contrary, HSRC director Wagner as director and board member of BitRush Corp acted oppressively against MezzaCap, its directors and shareholders. He tried to terminate the BitRush CEO who is also director of MezzaCap, he collaborated with the former BitRush CTO to establish a new management structure under HSRC lead and has, in general, acted disloyal against the partner MezzaCap. Furthermore, the HSRC people urged the BitRush CEO to do business with people that may have been involved in activities that have been qualified as non-compliant with KYC and AML regulations by the corporation’s consultants.
Not to deliver anything to add value to BitRush and to act disloyal and oppressive is simply against the words and the spirit of the shareholder agreement. Consequently, MezzaCap terminated the shareholder agreement and now filed a Declaratory Action against Igor Wollner, Sven Wollner, Chris Wollner, Hans-Joerg Wagner and HSRC before the appropriate court in Vienna to reclaim the 12 Million shares that have already been delivered to them.
Update: Court File No: 6 C 4/17b just in case your are interested!
Shareholders close to BitRush Corp are fully aware of the fact that some minority shareholders around the Slovakian family office of Igor Wollner, his sons Sven and Chris Wollner and his friend Hans-Joerg Wagner try to take over the control of BitRush Corp in an unfriendly way. Not really exciting news, right? They obviously want to use BitRush’s payment system ANOON for some purposes that may not be in compliance with KYC and AML regulations.
In order to make that happen the Wollner Family initiated and finances an application to commence legal proceedings against MezzaCap Investments Ltd in Toronto. They filed an application for a legal proceeding before the Superior Court of Justice – Commercial List, Toronto. Well that’s really strange because the Commercial List deals with matters in the Toronto Region only. Neither does BitRush Corp have an operational office in Toronto nor does it have any business activities over there or any operational contracts. On the contrary, the corporation’s president Arend explicitly informed the Toronto Court that he has no access to any operational asset and no idea how to maintain and develop them. Does did sound like kind of offshore lingo to you?
As the applicants of the legal proceedings, the minority shareholders and BitRush directors Karsten Arend and Hans-Joerg Wagner explain in their application, all decisions regarding the corporation are taken outside Toronto/Canada – in Vienna, Austria, to be exact. Not to mention that the board member Wagner has been to Toronto just once – after he and his fellow shareholders around the Wollner Family started their legal dispute with MezzaCap. A typical offshore approach, right?
Thus, the BitRush Corp CEO and a board member recently have initiated discussions with the Austrian Financial Authorities to check whether the Vienna office of BitRush Corp has to be qualified as the operational headquarter. And, guess what, the Austrian Financial Authorities qualified BitRush Corp as an Austrian corporation. As BitRush Corp does neither have an office in Toronto nor operational people its registered office address Richmond Str 113 W in Toronto is simply a “registered office” for formal purposes but for sure not the corporations Head Quarter.
On December 23, 2016, BitRush Corp announced that “A MOTION HAS BEEN SCHEDULED FOR JANUARY 4, 2017” seeking the following:
- An interim Order that Werner Boehm deliver or cause to be delivered forthwith to BitRush the corporate assets and property of BitRushand its subsidiaries that continue to be within his possession or control; and
- An interim Order that Werner Boehm cease dealing with BitRush’s assets, communicating with BitRush’s customers, or holding himself out as an officer of BitRush or its subsidiaries.
The press release has been done by BitRush director Karsten Arend allegedly on behalf of the Board of Directors. No further guidance has been given to the public.
Well, let’s comment on that new piece of disclosure:
- Firstly, it has not been made on behalf of the Board of Directors as at least one of the board members has not even been informed about the legal proceedings let aside the press release. Thus, this press release is – once again – false and not in line with the applicable Disclosure Standards. This is exactly the behavior that has been applied when filing the financial statements for Q3 – claiming to have the necessary approvals without having them.
- Secondly, the public should have been informed about the big picture: the directors Karsten Arend and Hansjoerg Wagner personally filed a notice of motion asking the court for the following decisions in their favor:
Based on the information provided to the Superior Court of Justice – Commercial List the only thing Karsten Arend and Hansjoerg Wagner got was the abridged time for the filing the motion materials; Fair enough, we guess! But we, too, are convinced that the press release should definitely have provided additional guidance to comply with the Disclosure Standards. This is what we do here on this site anyway!
People familiar with the concept of the Radical Constructivism are aware of the fact that people tend to build their own realities based on their experience and capabilities. According to the Radical Constructivism there is no such thing like a generally accepted (objective) reality but only a very personal (subjective) one. Thus the concept of Radical Constructivism may explain the behavior of BitRush’s minority shareholder HSRC and their director Hansjoerg Wagner.
Even though MezzaCap declared the Rescission of the Partnership with HSRC already back in November 2016, HSRC continues to claim to be a 21% shareholder of BitRush. Truth is that HSRC and Hansjoerg Wagner hold approximately 8% of BitRush shares which they bought in Private Placements. This is the undisputed percentage of shares they bought and hold in BitRush.
Fact is, that MezzaCap declared, for important reasons, to rescind from, and to terminate with immediate effect, its partnership contract with Hansjoerg Wagner, Igor Wollner, and their investment vehicle HSRC Investment PTE. Ltd. back in November 2016. Consequently, MezzaCap demanded HSRC to transfer back 12.493.090 shares in BitRush back to Mezzacap Investment Ltd.
Even in case HSRC, Hansjoerg Wagner and Igor Wollner will fight the Rescission they must not claim that they already are an undisputed 21% shareholder of BitRush. This provides a false picture to other shareholders, authorities and stakeholders. The BitRush CEO insisted to have this Rescission included into the notes for the filings of the Q3 statements which has been denied by the BitRush directors Hansjoerg Wagner and Karsten Arend. They filed their version in the name of the CEO (!) anyway – not mentioning the Rescission and possible consequences.
More about the Shareholder Agreement and the discussion around it to be read in Part III.
In November 2016 MezzaCap Investments Ltd terminated the shareholder agreement with the Slovakian/Singapore investors HSRC Investment Ltd for several reasons. It became clear that the HSRC was not prepared to share the strict view MezzaCap had on the KYC/AML policy that should be applied by BitRush regarding its cryptographic payment system ANOON. Moreover, the BitRush CEO has been urged by some directors and officers to do business with people and organizations that didn’t comply with generally accepted KYC/AML standards. The BitRush directors Karsten Arend and Hansjoerg Wagner refused to inform the BitRush shareholders about this termination.
We just received a copy of a letter from a Toronto-based lawyer who obviously is the counsel to the Special Committee of the board of directors of BitRush Corp. The Special Committee, comprising Karsten Arend and Hansjoerg Wagner, was established on December 7, 2016 by Karsten Arend and Hansjoerg Wagner to investigate and address the events surrounding the Cease Trade Order (CTO) made against BitRush by the Ontario Securities Commission (the “OSC”). No valid Board Decision was made to establish the Special Comittee and the Comittee then will report its findings to the Board, i.e. to Karsten Arend and Hansjoerg Wagner.
This is a strange situation as exactly those two directors are responsible for the Cease Trade Order (CTO) issued by the OSC. They did a filing in the name of the CEO even though the CEO neither approved nor certified the filing. On the contrary, upon the advise of the mandated CPA and the lawyer the CEO refused the approval as the wording of the filing regarding some incidents surrounding the filing may be misleading for shareholders. As a consequence of the refusal to approve and certify the filing the two directors terminated the CEO as “that is the only way to get the BitRush case past the OSC!!!” as Hansjoerg Wagner informed the CEO via WhatsApp.
Well, and those two directors established themselves now to investigate their own activities as the only members of the Special Comittee.