/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
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.
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.
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.
SOURCE Coventree Inc.
For further information:
Craig Armitage, The Equicom Group Inc.
Tel: (416) 815-0700 x278
Ani Hotoyan-Joly, Coventree Inc.
Tel: (416) 572-2721