Free Declaration - District Court of Delaware - Delaware

Case 1:04-cv—O1380-G|\/IS Document 44-11 Filed O4/05/2005 Page 1 0f 3

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15 2 IN THE UNITED sATEs BANKRUPTCY COURT ;
( n y§ Eon THE DISTRICT OF DELAWARE i
1 3
WM 4 In re: ) Chapter 11 g
ii 5 GST TELECOM INC., et al > g
§° ) Case No. 00-1982 (GMS) g
§‘ 6 Debtors ) Q
§~ ) Jointly Administered Q
7 ---------------~-------—-- )
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w GST TELECOM, INc., et ai, > i
Counterplaintiffs ) g
$2 10 > §
e ,,,. V O )
Q ·»»IEEI JOHN NARTA, ) €
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ig Counterdefendant. ) g
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15
5g 16 Deposition of PETER LEGAULT, called for g
W 17 examination pursuant to the Federal Rules of g
if 18 Bankruptcy Procedure, taken before me, the E
is 19 undersigned, Connie A. Holton, Chartered Shorthand‘ §
1 20 Reporter and Commissioner of Oaths within and for the i
1 21 Province of Ontario, taken at the offices of TORONTO g
36 22 COURT REPORTERS, 65 Queen Street West, Suite 1410, g
1 23 Toronto, Ontario, Canada, on the 23rd day of Q
, 24 September, 2004. Q
1 I25 _ E
TORONTO COURT REPORTERS — (416)364-2065
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Case 1 :04-cv—O1380-GIVIS D0cume,nfJgg46R1 Filed O4/05/2005 Page 3 of 3
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p Page 74 Page 76
1 discussion at that time related to Magnacom and GST? 1 but before the June 15th board meeting in New York,
Q 2 A. I don‘t, no. 2 did you have discussions with any other board members
3 Q. Let me direct your attention to the 3 about GST activities?
4 page marked 12801. There's a section in which "The 4 A. Iprobably did, yes.
§ 5 Audit Committee would like to make the following 5 Q. Do you recall any specifically?
A 6 recommendations to the board of GST." Number 2 is 6 A. I think I spoke to Roy Megarry about
. . 7 that "'I`he board receive a memorandum from management 7 it, about how their flight had gone back, there was
8 detailing the relationship of Magrracom and GST." Do 8 obviously discussions going on coming back from that
V J 9 you recall whether or not the board ever received 9 meeting that I missed because I didn't take the same
10 such a memorandum? 10 flight that they did. Iwould only talk to Roy about
; ll A. I don’t recall. I think there was a 11 that. Fogg was not one of my favorite people.
i 12 lot of discussion about it, but whether we got a 12 Q. But you got along reasonably well
13 memorandum or not I'm not sure. 13 with Roy Megarry?
A p 14 Q. All right. After the 5.4 million 14 A. I brought Roy on the board, so yes.
I 15 was advanced to Magnacom without board approval, do I 15 Q. Do you recall any ofthe substance
§ 16 you recall whether or not the board felt to a certain 16 of the discussion with Roy Megarry?
17 degree that its hands were tied with respect to 17 A. No, I don't. if
18 advancing additional monies up to what was ultimately 18 Q. Would it be fair to say your general
19 14.4 million? 19 impressions between those board meetings —-
20 A. I think it's sort of like being a 20 A. He was pretty negative on John.
21 bit pregnant at that point, because you're either in 21 Q. He, Roy?
22 or you're out of it. We would have lost the 5.4 22 A. Yes, Roy was.
Q fi 23 million had we not sort of continued to make the next 23 Q. And where were you at that stage on
A`} 24 payment, and as part of the long term strategy that 24 John?
g 25 fit into what the board had agreed to. 25 A. Probably neutral. Yes. I mean,
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n 1 Are we finished with this document? 1 after John walked out of the room I went to talk to
I i‘l’ ” 2 Q. We are. Thank you. 2 him and told him he made a big mistake in doing that.
E 3 Mr. Kent asked you some questions 3 Q. You told John that?
4 about the events surrounding John Warta's departure 4 A. Oh, yeah, for sure. And he had made
, i 5 from GST, and particularly with respect to a couple 5 a big mistake.
6 of board meetings on June 2nd and 3rd in Vancouver 6 Q. Did you have any concerns at that
7 and then June 15th in New York. I would like to 7 point in time as to whether or not John Warta had
8 generally talk to you about that a bit. 8 breached his fiduciary duty to the company?
9 At any point in time around those 9 A. No.
10 meetings, or prior to those meetings, were you privy 10 Q. At this point you were neutral as to
ll to any analysis by McCarthy, Tetrault, the Canadian 11 whether or not he should continue, but that was
12 law firm, as to any concems about the activities of 12 simply a prospective business decision ·—
13 John Warta or any other board member? 13 A. Right.
, 14 A. I wasn't privy to anything that they 14 Q. —· vis-a-vis GST, correct?
, 15 did, no. 15 A. That's right.
16 Q. You testified that at the June 2nd 16 Q. Now, if a determination had been
17 and June 3rd board meeting on the second day there 17 made that John had breached his fiduciary duty to the
18 was discussion about the strategic direction of the 18 company, you understand that that might affect the
I { 19 company, and that John Warta was essentially a 19 company's obligations to John under his employment
‘ ei 20 minority of one with his position that expansion 20 contractor or under any indemnity agreement'?
21 ought to continue aggressively, correct? 21 MR. KENT: Objection. Argtunentative.
22 A. I'm not sure I would categorize him 22 Legal conclusion.
23 as a minority of one on it, but he was in the 23 BY MR. GIBBONS:
24 minority put it that way. 24 Q. I'm just asking for your
, 25 Q. After that board meeting over, 25 understanding, Mr. Legault.
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