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8/20/15

Daryl and Chuck's Excellent Adventure

We know that before he worked at Minera IRL, Daryl Hodges worked at the now defunct Jennings Capital. We know that Daryl Hodges became the CEO there and from that moment on the company went downhill. We know Daryl Hodges then left Jennings. But we now know a lot more about the circumstances of that event. The Globe & Mail article "Jennings Capital replaces CEO, shuffles management" dated September 20th 2013 is behind a paywall, but if you get through that you find quotes such as:
Jennings showed former CEO Daryl Hodges the door, replacing him with Calgary-based head of energy banking David McGorman.  “The board made a decision on Wednesday and made the changes,” Mr. McGorman said in an interview. “Mr. Hodges is not with the firm any more.”
But why should that be so? IKN Nerve Centre today spoke with someone who was a high-ranking member of the Jennings team at the time. The source told your humble scribe that when he took over, Hodges ran the shop into the ground and the end came when a group of Jennings shareholders got together to depose him in order to salvage what little capital was left there. But it wasn't easy, as Hodges hired lawyers (using Jennings' own cash of course) to fight any moves against him and managed to run up a legal bill of over C$1m before he was fired. Along with that tidy sum he also saw many lawsuits brought against Jennings, some of which are still outstanding today (since Mackie bought Jennings out and took on the liabilities).

It just so happens that one of Daryl Hodges' favourite lawyers and a main beneficiary of business from Hodges' ill-fated time at Jennings is Chuck Higgins of Fasken Martineau. My contact today said the following about their cozy relationship (permission to quote received):
"One of his main legitimizers is a Fasken lawyer named Chuck Higgins, a real piece of work and cut from the same cloth"
Amazingly, coincidentally, purely by chance our Fasken lawyer Chuck Higgins does the Canada regulatory work for Minera IRL, where Daryl Hodges showed up after being booted out of Jennings and is now trying to grab all power for himself. The weirdly coincidental nature of this Higgins/Hodges repeated double-act brings up the potential for an obvious conflict of interest, but if it were just the above little snippet of information there would be suspicions but nothing much else to tie Higgins and Hodges together.

But there's more. As a matter of fact, Daryl Hodges and Chuck Higgins are joint owners of a bar in Toronto, The Pilot (N°22 Cumberland St, apparently the best place to sip your drink is the rooftop patio). Not only that, but they're often seen boozing in each other's company at their jointly-owned bar. They're friends, business partners and it just so happens that the place Hodges is now running his nefarious coup d'etat plans is the very same company that had the misfortune to have Chuck Higgins as one of its main legals.

Conflict of interest? You better believe it.