TORONTO, Jan. 25, 2017 /CNW/ - GrowthWorks Commercialization Fund Ltd. (the "Fund") reported today that its board of directors (the "Board") has determined that it is in the best interests of the Fund to agree to the termination, effective January 23, 2017, of the management agreement entered into between the Fund and GrowthWorks WV Management Ltd. (the "Manager"), the former manager of the Fund, on June 28, 2005 (the "Management Agreement").
On January 17, 2017, the Fund disclosed that the Fund had received ambiguous correspondence from the Manager which, among other things, purported to terminate the Management Agreement. After considering further correspondence from the Manager, the Board has determined that the Manager has failed to provide a lawful basis for terminating the Management Agreement.
Nevertheless, given the Manager's apparent and persistent desire to terminate the Management Agreement and a deterioration of trust between the Fund and the Manager, the Fund has, in accordance with the terms of the Management Agreement, agreed to terminate the Management Agreement effective January 23, 2017.
The Fund continues to seek additional information from the Manager, including with respect to the amounts which the Manager has paid itself on behalf of the Fund without the Board's knowledge. Based on the Fund's preliminary investigations, the Board believes that the Manager has wrongfully withdrawn approximately $1.5 million (or approximately one-half of the Fund's cash on hand) from the Fund's bank accounts.
The Fund has commenced legal proceedings against the Manager to recover those funds and to obtain other related relief.
The Manager's recent actions with respect to the Fund's cash resources have materially and adversely affected the Fund's liquidity.
This press release contains forward looking statements, including statements with respect to the impact of the termination of the Management Agreement, 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 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 or its officers and directors and other representatives or both. 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 Commercialization Fund Ltd.
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For further information: C. Ian Ross, Chairman of the Board of Directors, (416) 619-9118