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Carbon Friendly sued for not paying finder's fee

Carbon Friendly Solutions Inc



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Close 2012-02-24

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Carbon Friendly sued for not paying finder's fee

2012-02-24 14:17 ET - Street Wire

by Mike Caswell

Carbon Friendly Solutions Inc. is facing a lawsuit in the Supreme Court of British Columbia over an unpaid finder's fee stemming from its acquisition of MicroCoal Inc. in 2011. The suit claims that Carbon Friendly agreed in January, 2011, to pay the fee, assuming it acquired MicroCoal within 12 months. According to the suit, it closed the deal on Dec. 22, 2011, but did not pay anything.

The allegations are contained in a notice of claim filed at the Vancouver courthouse on Thursday, Feb. 23, by Phoenix Alliance Corp., a Surrey-based "business consulting and merchant banking firm." Phoenix says it entered a finder's fee agreement with Carbon Friendly that was linked to the company's proposed acquisition of MicroCoal. Under the deal, Carbon Friendly would pay $300,000 to Phoenix upon acquiring a majority interest in MicroCoal and a further $150,000 upon acquiring all of MicroCoal.

Phoenix claims that it played a significant role in the acquisition. In particular, it negotiated the settlement of several debts that MicroCoal had, including a $2.4-million (U.S.) loan. Phoenix also negotiated an agreement with a MicroCoal shareholder in which the shareholder agreed to sell its 48-per-cent interest at a loss, the suit states.

Moreover, Carbon Friendly has previously acknowledged that it owes the fee, according to the suit. In a Jan. 31, 2011, news release, it said that a consultant would receive $450,000 upon completion of the MicroCoal acquisition.

Phoenix complains that despite requests, Carbon Friendly has either refused or failed to pay the fee. It seeks a court-ordered payment of $450,000, plus interest and court costs. Vancouver lawyer Jeffrey Wittmann of Wiebe Wittmann El-Khatib LLP filed the suit on behalf of Phoenix.

Carbon Friendly has not yet filed a response to the suit. The stock closed at 28.5 cents on Friday.

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