As a shareholder I blame Hennis. He knew what was in that mine before he bought it. That's why the purchase price was so low. Doesn't take much imagination to see the plan; buy a mine for a few grand, use hundreds of thousands of shareholder dollars from another company(cgfi) to develop the mine, while at the same time litigating yet another company(Sunnyside) to pay for the cleanup. In the end he would have personally owned a mine someone else paid for while the shareholders would gain basically zip. The mine wouldn't be in the company portfolio and the ore milled at that mine would have been processed at a discount. Factoring in the money spent - shareholders would have realized negative cash flow!
A good analogy would be a used car. It's like buying a 1976 Mustang for $50, with 250,000 on the clock and every body panel rusted to nothing, engine froze, that's been sitting in a field for 20 years. Hennis tows his car home and the first thing he does is sue all the prior owners for damages. While that's in the works he starts siphoning off a savings account he shares with his elderly Mom to install a windshield and put new tires on rusted rims. When the lawsuits fall through and his Mom takes his name off her account he jumps up and down, screaming like a little girl. Next day proceeds to sue his Mom until the legal fees put her on the street. The city gets tired of the eyesore of a car and has it towed, not knowing the frame is rusted through. When half the car falls off on the highway and takes out a school bus of preschoolers - first thing Hennis does is start blaming the prior owners again, thinking it'll help the new lawsuit.
Just for fun I'm envisioning the circumstances where I would agree with you - where Hennis would have shown good faith.
Let's say the hypothetical scenario was this: as CEO of CGFI, Hennis offered to sell the company his mine, at say, double what he paid for it. Can't remember what he paid - think it was something like $4 grand. So he offers to sell the mine to the company he heads for $8,000 while disclosing it's a toxic dump. After discussion with the officers he see's the liability involved and does a 180 - instead of sinking our money into a dead horse he uses the shareholder cash to complete the mill. He would have been my hero.
Again, he knew that mine was a toxic dump when he bought it. He knew there was no way of telling who was responsible for the flooded shafts when he bought it. Nothing more than an opportunity to use litigation to get something for nothing.
I do give him Kudos for his selfishness and greed though - without it it's possible the mine would be tied to shares I own.
