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making of false and misleading statements regarding the company’s
operations.9
Litigation Involving Solv-Ex
In October, November, and December 1996, Solv-Ex, Mr.
Rendall, and other officers of Solv-Ex were made defendants in
class action suits brought by Solv-Ex shareholders alleging false
and misleading statements relating to Solv-Ex in violation of
both Federal and New Mexico securities laws. The claims alleged
in those lawsuits were recognized as claims in the joint
bankruptcies, or the action was stayed by reason of the chapter
11 bankruptcy. In the amended disclosure statement, Solv-Ex
expressed its intent “to vigorously defend the actions filed
against it”, and it stated its belief that those actions were
“without merit”.
On August 9, 1996, Solv-Ex sued certain individuals and
entities in the U.S. District Court for the Southern District of
New York, seeking damages in excess of $12 million for actions
intended to further the defendants’ short selling schemes. The
suit was dismissed without prejudice because of the bankruptcy
proceedings. In the amended disclosure statement, Solv-Ex stated
its intent to refile the suit following its discharge from
bankruptcy. In October and December 1998, Solv-Ex brought suits
9 The SEC did commence such an action in Federal District
Court on July 20, 1998.
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