N.B. pension manager asks court to throw out lawsuit

The company that manages billions of dollars in pension funds for thousands of New Brunswick public-sector employees and retirees is asking a court to throw out a lawsuit by angry tech investors.

Fredericton-based Vestcor Inc. and one of its senior executives are the targets of a petition filed in British Columbia that is seeking court approval for a class-action lawsuit.

The company is accused of falsely inflating the value of a corporate merger between two technology companies, causing investors to lose money.

In a court filing last Tuesday in B.C.’s Superior Court, Vestcor argues that the investors have not established that it or its vice-president of equities, Mark Holleran, had any duty to shareholders of Exro Technologies.

The investors argued Vestcor and Holleran were “de facto” directors because Vestcor owned the majority of shares in Exro at the time, but Vestcor argues there’s not enough evidence to support that argument.

“The petitioners have not particularized or plead material facts to support their allegations that the respondents are de facto directors of Exro,” the filing says.

“Rather, the petitioners baldly allege that the respondents ‘elected’ to act as, ‘assumed’ the role of, and ‘effectively acted as’ directors and officers of Exro, without particularizing the nature of the alleged election, assumption, or actions.”

Without a clear basis for the court action, the petition should be struck, the filing argues.

According to the petition application, Vestcor was the majority shareholder in Exro and “orchestrated and significantly influenced” its 2024 merger with SEA Electric Inc., in which Vestcor also owned shares.

Exro paid $300 million to acquire SEA Electric after telling its shareholders that SEA would make $200 million in profits in 2024 — a figure that proved “delusional,” the court filing says.

It alleged Vestcor and Holleran encouraged other Exro shareholders to approve the merger to “salvage” Vestcor’s “significant investment” in SEA Electric.

Vestcor’s response says the petition is based on assumptions and speculation, making allegations that can’t be proven.

Vestcor invests the pension contributions of New Brunswick civil servants, teachers, hospital workers, nurses, Crown corporation employees, provincial court judges, MLAs and others in various investment vehicles, including stocks.

It managed a total of $23 billion in 2024, an increase of $2 billion over 2023.

CEO Sean Hewitt said in a statement in the fall that the impact of the Exro collapse on Vestcor’s overall portfolio was “negligible” and it would not affect the pension benefits it pays out to retirees.

Exro recorded a lost of $226 million in November 2024, including $211 million from the loss of value of SEA Electric’s assets.

That led to Exro’s collapse.

The petition was filed by two shareholders, British Columbia resident Bryan Irwin, who held  27,500 common shares worth $22,000 at the time of the merger, and Ontario investor Mike Zienchuk, who had 900,000 shares worth an amount not disclosed in the court filing.