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Judge allows LOC suit to go forward

Three shareholders at the Lake Oswego Corporation plan to go forward with a lawsuit against the company after a Clackamas County Circuit Court judge ruled Monday that the trio - Doug Oliphant, Doug Reiter and Jerry Stubblefield - can pursue a claim of election fraud.

The ruling doesn't change the status of the lawsuit, which in May was reduced from broad claims of corporate malfeasance to the single oppression claim.

Judge James Tate reaffirmed the status of the case when the Lake Corp moved to dismiss new filings at a hearing Monday. Tate ruled that the three plaintiffs could pursue a claim that the Lake Corp oppressed them in elections for the board of directors in May 2005.

He said they may use other charges, such as a corporate failure to protect shareholders from city pollution and to notify them of potential health hazards, as evidence of motive in the oppression case.

'It just means that the lawsuit will go forward,' said Stuart Brown, attorney for the Concerned Shareholders.

Brown had previously filed the case, alleging other claims, including waste of corporate assets, director self-dealing and a conspiracy to help developer Jeff Parker evade city building codes. Those claims - repeated in recent court filings - met with the same fate as similar accusations made last spring: They will not go to trial.

But the charges of election fraud will roll forward. The claims stem from a May 2005 election for the Lake Corp board of directors in which the Concerned Shareholders - a group of about 100 lakefront shareholders - offered a slate of candidates to oppose board-nominated picks. Those names did not appear on shareholder ballots. The Lake Corp required a single proxy ballot for their own absent supporters but required the Concerned Shareholders to file separate proxy ballots for each of their absent voters.

The Concerned Shareholders said the hasty paperwork resulted in errors that later disqualified some voters. Both sides disagree about the final tally and the Lake Corp refused a recount in the election.

Those claims will be heard in a trial now set for Dec. 5.

Barnes Ellis, attorney for the Lake Corp, said the three plaintiffs are still a long way from proving their claim in spite of Monday's decision.

'That doesn't mean they have ever come forward with a single fact. It just means they can stay in court,' said Ellis.