Trading Symbol: NRS
VANCOUVER, Jan. 19 /CNW/ - The board of directors of Norwood Resources
Ltd (the "Company": NRS-TSXV) have assigned the Company into bankruptcy
and appointed D. Manning & Associates Inc. as Trustee in Bankruptcy
over the Company's assets and undertaking. The Company is insolvent and
the board is of the view that with its lack of exploration success and
deteriorating financial condition, that there are currently no
realistic alternatives for financing and as such, that a bankruptcy
process including liquidation of assets by an independent party, and
possible proposals for reorganization through a bankruptcy process, is
in the best interests of the Company's various stakeholders.
In September 2010 the Company entered into negotiations with an
investment syndicate led by Graeme Phipps, who had resigned from the
board of directors in order to pursue the financing on an arms-length
basis. Mr. Phipps had indicated over the several months prior to
September 2010 that he had obtained significant financial commitments
to complete a re-organization and refinancing of the Company. Following
a due diligence period, these negotiations resulted in signing of a
letter of intent effective November 15, 2010 for an equity financing of
a minimum of US$20,000,000. The financing was subject to a number of
significant conditions including settlement of the Company's two
lawsuits, completion of definitive documentation, shareholder
approval and approval by the Company's secured noteholders. Although
the investment syndicate was able to reach tentative settlements which
it considered to be acceptable on the Company's lawsuits, and
definitive documentation had been negotiated in a form which was
considered by all parties to be acceptable for execution, the financing
group was unable and/or unwilling to proceed with agreed upon interim
deposits and it became apparent that the syndicate was not going to
proceed. Accordingly, the financing proposal was not put to
shareholders or noteholders for approval.
In conjunction with the assignment into bankruptcy, all board members
have resigned their positions with the Company.
SOURCE Norwood Resources Ltd.
For further information:
D. Manning & Associates Inc.