@rgentum Management and Research Corporation, a Quebec-based manager of the @rgentum Group of Mutual Funds has been transferred under a litigation settlement agreement between Blue Heron Financial and Merchant Capital Group Inc.

Under the terms of the settlement agreement, Blue Heron has agreed to transfer ownership to Merchant Capital of all the shares in Blue Heron’s wholly owned subsidiary, @rgentum Management and Research Corporation, a Quebec-based manager of the @rgentum Group of Mutual Funds. In addition, Blue Heron will transfer to Merchant Capital the dealer network contained in subsidiary, Blue Heron Wealth Management Inc., as well as certain related employees.

In consideration for entering into the settlement agreement, Merchant Capital has agreed to cancel any of Blue Heron’s obligations with regard to $1,382,206 secured convertible debt Merchant Capital holds in @rgentum, less $355,000.

The settlement agreement and related share issues are subject to regulatory
and shareholder approvals but has received the approvals of the board of
directors of both Merchant Capital and Blue Heron.

Blue Heron has called a special meeting of its shareholders to be held March 28; at which it will also be seeking shareholder approval to a 2:1 share consolidation and a change of name.

Certain directors of Blue Heron have agreed to resign in favour of new nominees of 180 Capital. Greg Levi, the former president, chief executive officer and a director of Blue Heron, has commenced a claim for wrongful dismissal. Management of Blue Heron feels the claim is without merit and intends to defend it vigorously.