Edmonton, Alberta. August 27th, 2008 (CCN Mathews via COMTEX News Network—Poly-Pacific International Inc. (“Poly-Pacific” or the “Company”) (TSX VENTURE: PMB) OTCBB: PLYPF) (BERLIN: AOLGDN; FRANKFURT: POZ) announces that a Complaint has been filed against it by a Relator / Qui Tam Plaintiff Raymond F Williams (the “Relator”). In addition to Poly Pacific, the Canadian Commercial Corporation (“CCC”), a Canadian Crown Corporation, is named as a co-Defendant.
A Qui Tam action is one made under the U.S. False Claims Act by a private Plaintiff purporting to act on behalf of the U.S. Federal Government (rather than by the government itself). These actions are sometimes referred to as “whistleblower lawsuits.” In a Qui Tam action, the government has the right and option to intervene and join the action or the government may decline the intervention in which case the private plaintiff may proceed on his own. With respect to this particular action, it was submitted to the U.S. Department of Justice for the government to join in on the action. The United States government notified the Company that it has declined to participate.
The Relator alleges that Poly Pacific failed to comply with its statutory and contractual obligations concerning the Company’s recycling program of its spent media. While the Complaint was filed in the US District Court in July, 2006, for reasons unknown to the Company, the Complaint was served upon the CCC only, and not served upon Poly Pacific at that time. With respect to damages being claimed, the Plaintiff is asking for judgment in an amount equal to three times the amount of damages that were sustained as a result of Poly Pacific’s actions in the sum of $10,000 for each infraction proved, plus costs and damages.
Although the Company was not served with formal notice of the Complaint until very recently, Poly Pacific was notified of the action by letter dated August 21, 2007 from the CCC. Without any input sought from or notice given to Poly Pacific, the CCC entered into a settlement agreement with the Relator on March 4, 2008, whereby the CCC agreed to pay the sum of $325,000 in full settlement of all damages and claims. The Company received no notice of proceedings until it received a letter from the CCC recently, asking that it indemnify the CCC for the settlement amount plus costs.
Poly Pacific’s position is that the allegations of the Relator are without merit and the Company will vigorously defend itself from all allegations. With respect to the request from the CCC for indemnity, the Company believes it has a valid legal defense based upon its position that the settlement amount was excessive and unproven, and made without any notice to Poly Pacific.
The Canadian Commercial Corporation (“CCC”) is a Crown corporation of the Government of Canada and acts as Canada’s international contracting and procurement agency. The company was first established in 1946 to assist in the development of trade between Canada and other nations, to assist persons in Canada to obtain goods and services from outside Canada and to assist in exports from Canada to other countries. In 1956, the CCC was given additional responsibility of the shared Canada - USA industrial defense production agreement with the US Department of Defense.
The Company further announces today that it has closed a non-brokered private placement (“Private Placement”) of units (“Units”) consisting of one (1) common share and one (1) common share purchase warrant (a “Warrant”). Each Warrant entitles the holder to purchase an additional common share at $0.10 for a period of twenty four (24) months from the date of issuance. The securities issued under the private placement are subject to a four-month hold period.
Under the Private Placement, 1,300,000 Units were issued for gross proceeds of $65,000. It is anticipated that Poly-Pacific will use the proceeds for general working capital.
For further information please register for our newsletter to receive news, updates and background information on a regular basis: www.poly-pacific.comor please contact Randy Hayward, President of Poly-Pacific by telephone at (604) 324-2110
Poly-Pacific is an innovator in eco-friendly solutions to Industrial Waste by-products.
We are actively and successfully pursuing the reclamation of industrial polymers throughout the world.
The significance and importance of recycling and reclaiming industrial waste has become an important global issue. At Poly-Pacific, we are focused on benefiting our planet by exploring and pursuing new environmentally sound methods and technologies in recycling, while creating significant value for our shareholders as the leading company in the reclamation sector.
This release may contain forward looking statements within the meaning of the "safe harbor" provisions of US laws. These statements are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward looking statements. Poly-Pacific does not assume any obligation to update any forward looking information contained in this news release. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
FOR FURTHER INFORMATION PLEASE CONTACT:
Poly-Pacific International Inc.
Randy Hayward
President and Chief Executive Officer
(604) 324-2110
Email: info@polypacific.ca
Website: www.poly-pacific.com
