Stetson underwriter says it could be sued for delaying C$25 million placement

By Devika Patel

Knoxville, Tenn., Aug. 22 - Stetson Oil & Gas Ltd. is threatening legal action against lead underwriter Thomas Weisel Partners Canada Inc. regarding a C$25 million private placement of subscription receipts that priced July 14, according to an 8-K filed Friday by Thomas Weisel Partners Canada with the Securities and Exchange Commission.

As previously reported, the company had hoped to sell 45,454,600 subscription receipts at C$0.55 apiece.

The deal had a greenshoe for C$5 million, or 9,091,000 subscription receipts.

Settlement was expected July 31, but both parties acknowledged that the offering would not close on that date, Thomas Weisel Partners Canada said in Friday's filing. The filing said the parties engaged in discussions regarding financing alternatives for Stetson Oil.

On Aug. 18, the filing said, Thomas Weisel Partners Canada received a letter from Stetson Oil claiming that it would pursue legal remedies against the underwriter if the private placement did not close on Aug. 22.

Thomas Weisel Partners Canada responded to the letter by indicating that it did not intend to close the deal on Aug. 22 and that it believes that it has meritorious defenses to Stetson Oil's threatened claims.

The underwriter said in the filing it intends "to vigorously defend" itself and is also committed to continue to try to work with Stetson Oil regarding financing alternatives.

Based in Calgary, Alta., Stetson Oil & Gas is an oil and gas company.

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