Coventree Announces Date for Commencement of Winding Up
January 23 2012 - 5:15AM
PR Newswire (Canada)
/THIS PRESS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY./
NEX Symbol: COF.H TORONTO, Jan. 25, 2012 /CNW/ - Coventree
Inc. (NEX: COF.H) ("Coventree" or the "Company") today announced
that the Board of Directors of the Company has determined that the
winding up of the Company will commence on or about February 15,
2012. At the annual and special meeting of shareholders of
Coventree held on June 30, 2010, the shareholders approved a
special resolution authorizing the winding up of the Company and
the distribution of its remaining assets, if any, to shareholders
pursuant to the plan of liquidation and distribution (the
"Liquidation Plan") attached as Schedule A to the Company's
management information circular dated May 25, 2010. The
Liquidation Plan provides that it will become effective on a date
to be determined by the Company's Board of Directors. The
Board has determined that the effective date, being the date on
which the winding up will commence in accordance with the
Liquidation Plan, will be on or about February 15, 2012 (the
"Effective Date"). On the Effective Date, the Board of Directors of
the Company will be deemed to have resigned, and Duff & Phelps
Canada Restructuring Inc. (being the successor of RSM Richter Inc.)
will be appointed the liquidator of the Company (the "Liquidator")
for the purpose of winding up its affairs. In addition,
Geoffrey Cornish and Wesley Voorheis will be inspectors of the
Company's liquidation. The Company expects that, as soon as
reasonably practicable following the Effective Date, the Liquidator
will apply to the Superior Court of Justice (Ontario) (the "Court")
to have the winding up supervised by the Court and to seek the
Court's approval to establish a process for the identification,
resolution and barring of claims against the Company and its
directors and officers, both past and present. The Company
expects that, if approved by the Court, the date by which all
claims must be filed will be in March or April, 2012 (the "Claim
Bar Date"). Shortly after the Claim Bar Date, the Company
intends to make an initial interim distribution to shareholders in
an amount equal to the remaining assets of the Company, less the
sum of (a) an amount required to pay claims against the Company
that were filed on or before the Claim Bar Date, (b) an amount set
aside or reserved to pay claims against the Company that remain
outstanding following completion of the claims process, (c) an
amount required to pay costs to be incurred during the winding up
process, and (d) an appropriate contingency. Claims that may
be filed on or before the Claim Bar Date may include: the claim
made by Dean Tai and certain corporations affiliated with him
relating to the cancellation in April 2009 of certain Coventree
shares that were issued to him under Coventree's 2005 Share
Allocation Plan; claims made by Canada Revenue Agency relating to
taxes including claims relating to tax filings made by one of
Coventree's subsidiaries for 2007; and other claims currently not
known to the Company. Additional distributions to
shareholders may be made as the winding up process evolves. There
can be no assurances as to the number of claims that may be filed
on or before the Claim Bar Date and the monetary amount of such
claims. Accordingly, there can be no assurances regarding (a)
the time required to complete the claims process including to
resolve any claims that may be filed in accordance with that
process; (b) the amount that will be required to pay or make
provisions for claims against and the obligations of the Company;
and (c) the timing, amount or form of distributions to be made to
shareholders of the Company in connection with the winding
up. A number of factors, some of which are beyond the control
of the Company, will affect the timing of, or the amount of funds
available for distribution upon, the winding up of the Company,
including the fact that such matters are subject to the approval of
the Liquidator and the Court. The Liquidation Plan contemplates
that Coventree's common shares will continue to be listed and
traded on NEX after the Effective Date. However, the
continuation of the listing after the Effective Date is subject to
the approval of NEX. In that regard, the Company has had
discussions with NEX and intends to make a formal application to
NEX to maintain the listing of its common shares until the
completion of the claims process. However, there can be no
assurance that NEX will approve that application and, as a result,
there is a risk that Coventree's common shares will be delisted and
cease traded on NEX on the Effective Date. Even if NEX
approves the application to continue the listing beyond the
Effective Date, the Company expects that its shares will be
delisted and cease traded on NEX shortly after the completion of
the claims process. The foregoing description of aspects of the
Liquidation Plan is qualified in its entirety by the more detailed
information set out in the Company's management information
circular dated May 25, 2010, including, without limitation, the
text of the Liquidation Plan which is attached thereto as Schedule
A. Other Updates Coventree also announced that Geoffrey
Cornish and Dean Tai, who were also parties to the proceeding
commenced against the Company by the Ontario Securities Commission
(the "OSC"), have decided personally to appeal the OSC's ruling
that they violated Ontario's securities laws. Coventree previously
announced that it will not appeal the OSC's decision.
Coventree has entered into an agreement with Mr. Cornish to limit
the amount of legal fees and other costs related to such appeal for
which Coventree is responsible under its indemnity agreement with
him and to otherwise ensure that the interests of Coventree are not
prejudiced by such appeal. Mr. Cornish has agreed that
Coventree's liability to indemnify him for legal expenses and other
costs or awards arising from the appeal will be limited to
$725,000. The Company has agreed to support Mr. Cornish in
his appeal but will not participate in it. There is no
similar agreement with Mr. Tai. In another matter, Coventree
announced that the Board of Directors authorized the Company to
take appropriate steps to recover the amounts owing to the Company
by certain companies owned by Mr. Tai. Previously, the
Company disclosed that loans totaling approximately $1.62 million
as at December 31, 2011 that are owed by Mr. Tai's companies to
Coventree are now in default. Mr. Tai's companies have
pledged 500,000 shares of Coventree as security for those
loans. In order to recover the amounts owing, the Board of
Directors authorized the sale in the market of the 500,000
Coventree shares pledged by those companies and authorized
Coventree to enter into such agreements or other arrangements with
third parties as may be necessary or appropriate to facilitate such
sale. Forward-Looking Statements This press release includes
certain forward-looking statements relating to the Company's
expectations that the Liquidator will apply to the Court to, among
other things, supervise the winding up and establish a claims
process; the timing of the completion of the claims process; the
amount that the Company will be required to pay or make provision
for claims against and the obligations of the Company following the
claims process; the timing, amount and form of any distributions to
be made by the Company to shareholders as part of the winding up;
and the Company's intention to apply for the continued listing of
its common shares on NEX after the Effective Date. These
statements can be identified by the expressions "will", "expects"
and "intends". These forward-looking statements are not historical
facts but reflect Coventree's current expectations regarding future
events based on information currently available to Coventree. These
forward-looking statements are subject to a number of known and
unknown risks, uncertainties and assumptions which may be
substantial. Many factors could cause actual results or events to
differ materially from current expectations that may be expressed
or implied by such forward-looking statements, including, without
limitation, the various matters discussed under "Risks and
Uncertainties" contained on pages 10 to 12 of the Company's
Management Discussion and Analysis for the year ended September 30,
2011 which is available under the Company's profile on SEDAR at
www.sedar.com. Should one or more of these risks or uncertainties
materialize, or should assumptions underlying the forward-looking
statements prove incorrect, the Company may not be able to wind
down its operations or implement a formal winding up of the Company
in the near future or at all; and the amount of funds available to
be distributed to shareholders pursuant to such a winding up could
be significantly reduced and/or the timing of the distribution of
such funds could be significantly delayed. These factors should be
considered carefully and prospective investors should not place
undue reliance on the forward-looking statements. These
forward-looking statements are made as of the date of this press
release and Coventree does not intend, and does not assume any
obligation, to update or revise these forward-looking statements,
except as required by law. This press release is intended for
distribution in Canada only. Neither TSX Venture Exchange nor it
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release. Coventree Inc. CONTACT:
Craig Armitage, The Equicom Group Inc.Tel: (416) 815-0700
x278Email: carmitage@equicomgroup.com -or-Ani Hotoyan-Joly,
Coventree Inc.Tel: (416) 572-2721Email: ani@coventree.ca
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