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Dilution as a Remedy For a Default by a Shareholder

Ralph W. Godell, International Resources Law and Projects (1999)

In many countries, the use of an unincorporated joint venture is not available where two or more parties wish to jointly explore, develop and operate a mining property. It is often the case that a corporation will have to be used. While there are a number of articles which deal with dilution as a remedy for default in an unincorporated joint venture,1 there are very few which discuss dilution in the context of a corporation.2 One commentator has stated that trying to include a dilution provision in a corporate setting is forcing the issue3. This paper will raise some of the issues encountered when trying to include dilution as a remedy for default in a corporate setting.