Peter Guest has filed suit against Mediterranean Resources (TSX:MNR) for wrongful termination.
According to a March 28 BC Supreme Court notice of claim, the former president and CEO alleges he was fired on March 15 without cause.
The Vancouver company is focused on developing two early-stage gold properties in Turkey.
Guest was sacked at a March 15 board meeting where a 3-1 majority voted to have him ousted, according to court documents.
The suit further alleges the majority of directors knew that one of the board members, Jeffrey Nichols, had been appointed to the board based on “false representations.”
Guest claims that Nichols had been asked to resign from the board but refused, and Guest had been “spearheading” a process to have shareholders remove Nichols from the board.
Guest further claims the discussion about whether he should be fired was not disclosed to the board before the meeting.
Two months prior, concerned shareholders Philip Strathy, Frank Lucas and a numbered company, 2013072 Ontario Inc., called for a meeting to replace certain directors.
Guest was a director of Mediterranean at the time of his termination.
The concerned shareholders called for the meeting to increase the size of the board and oust directors Guest, Bryan Morris and Christopher Ecclestone.
The shareholders claimed that Guest was being paid too much, and that under his leadership the company had soaked up excessive corporate and general expenses.
Morris resigned his director’s seat on March 15, but Ecclestone has since been named interim CEO.
Guest is seeking damages for breach of an employment contract, claiming that Mediterranean is liable to pay him a severance.
On Thursday, Mediterranean cancelled a special meeting of shareholders scheduled for May 20.
The company said the shareholders who originally requested the meeting “no longer have cause to seek the removal of the company’s board and management” following the resignations of Morris and Guest.
Mediterranean also claimed that Guest’s suit is without merit, and the company intends to “vigorously” defend itself.
At press time, the company’s shares were up 3% to $0.17.