TORONTO, Jan. 17, 2017 /CNW/ - GrowthWorks Commercialization Fund Ltd. (the "Fund") reported today that it has received correspondence from GrowthWorks WV Management Ltd. (the "Manager"), the manager of the Fund, purporting to terminate, effective immediately, the management agreement entered into between the Fund and the Manager on June 28, 2005 (the "Management Agreement").
The Management Agreement sets out the specific grounds on which the Manager may terminate the agreement. The correspondence received from the Manager is ambiguous as to which of these grounds the Manager believes it is entitled to rely upon to terminate the Management Agreement in the circumstances and the Fund has requested further details from the Manager in this regard.
In its correspondence, the Manager indicated that it has paid on behalf of the Fund all amounts owing to the Manager under the Management Agreement and the share rights for the Class C shares of the Fund held by the Manager. The Manager has not confirmed the amounts that it paid itself on behalf of the Fund, and the Fund has made inquiries to this end. In addition, the Fund is investigating the basis upon which the Manager concluded that it had the authority to pay such amounts. In particular, the board of directors has not declared any dividends on the Class C shares that were outstanding on the date on which the Manager made those payments to itself. The Fund is also investigating the impact of the Manager's actions on the Fund's liquidity and cash resources.
The Fund is considering its response to the correspondence received from the Manager and the related actions taken by the Manager, together with all remedies available to the Fund in the circumstances, including but not limited to legal proceedings against the Manager and its officers and directors and other representatives. The Fund intends to take appropriate measures to preserve the assets of the Fund.
It is currently unclear how the correspondence received from the Manager and the actions of the Manager will impact the proposed winding-up of the Fund, including with respect to the ability of the Fund to obtain shareholder and regulatory approvals and the timelines for doing so, the liabilities of the Fund, the value of the Fund's assets, and any amounts to be distributed to the Fund's shareholders.
This press release contains forward looking statements, including statements with respect to the Fund's response to the correspondence received from the Manager, the actions of the Manager disclosed therein, potential legal proceedings, and the winding up of the Fund. These forward-looking statements reflect the Fund's current views and information and are based on certain assumptions, including, but not limited to, assumptions as to future liquidity and liabilities, regulatory and operating conditions, and other factors the Fund believes are appropriate. Such forward looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those contained in these statements, including, but not limited to, the risks and uncertainties relating to the purported termination of the Management Agreement and the ability of the Fund to manage its affairs over the near term; the Manager's withdrawal of a significant portion of the Fund's cash on hand and the materially adverse effect of those actions on the Fund's business, financial condition and prospects; and the outcome of any legal proceedings the Fund may pursue to successfully pursue remedies against the Manager and its officers and directors and other representatives. These risks and uncertainties may cause actual results, events or developments to be materially different from those expressed or implied by such forward-looking statements. There can be no assurance that conservatory measures taken by the Fund will be effective, that legal proceedings will occur or be successful, or that the winding-up or any other transaction will be completed. Unless required by law, the Fund does not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or results or other factors.
SOURCE GrowthWorks Canadian Fund Ltd.
For further information: C. Ian Ross, Chairman of the Board of Directors, (416) 619-9118