Ousted Empire Oil & Gas founder Craig Marshall last night vowed to vigorously defend his conduct as a director after the company's new board took Supreme Court action to recoup almost $500,000 in legal bills.
Empire alleged in its writ that Mr Marshall and fellow long-serving directors Neil Joyce and Bevan Warris contravened sections of the Corporations Act and breached their fiduciary duties by using company funds to pay for personal defamation actions.
The action comes a month after shareholders, led by 10 per cent investor ERM Power, took control of Empire's boardroom and ousted Mr Marshall and Mr Joyce.
Dr Warris stayed on as a director but within hours of Empire announcing its Supreme Court action yesterday it confirmed that Dr Warris had resigned, effective immediately.
The Empire action against its former directors is one of the most significant ones in recent WA corporate history and a key milestone in what has been an ugly dispute between the com- pany and its shareholders.
At the heart of the Empire claim is that the defamation action launched by Mr Marshall, Mr Joyce and Mr Warris against a raft of disgruntled investors should not have been paid for with company funds.
Empire is claiming a declaration that the three former directors breached the Corporations Act and that they pay $441,632 in damages, as well as costs.
But Mr Marshall, the architect of Empire's Perth Basin exploration push and construction of its flagship asset, the Red Gully gas-condensate plant, hit back last night and said he and the other two accused would "certainly defend ourselves".
"It has always been the case that the company can't defend itself (against damaging commentary), only the directors can," Mr Marshall said. He also took issue with Empire's declaration on Thursday that $22,000 cash that was recorded in its audited full-year accounts, reflecting proceeds from defamation case settlements, was missing.
Mr Marshall said the cash was being held in a solicitor's trust account, as per a deed of settlement, on behalf of Empire.
Mr Marshall and Mr Joyce quit Empire on the eve of a shareholder showdown last month when it became clear they had lost the support of investors.