Toronto-based GrowthWorks Canadian Fund Ltd. announced Tuesday that its board has authorized the fund to initiate proceedings seeking a court supervised process under the Companies’ Creditors Arrangement Act (CCAA).
In the CCAA application, the fund seeks approval for a court supervised process for the ongoing management of the fund, including the disposition of its portfolio investments, the refinancing of the fund’s secured payment obligations to Roseway Capital S.a.r.l. under the participation agreement between the fund and Roseway dated May 28, 2010, as amended, and other strategic alternatives.
The CCAA application also seeks a stay of certain creditor claims that would enable the fund to maintain normal business operations as the strategic process is implemented.
Court proceedings are to take place Tuesday in in the Ontario Superior Court of Justice in Toronto.
The fund and Roseway have not reached agreement on the terms of an extension of the fund’s payment obligations to Roseway under the participation agreement totalling approximately $27,264,570, which has resulted in those amounts becoming due.
The fund says it has insufficient current assets to satisfy those obligations. As a result, the fund with the support of Roseway, will initiate the CCAA proceedings.
The fund also announced the termination of the amended and restated management agreement dated as of July 15, 2006 between GrowthWorks WV Management Ltd. and the fund in accordance with its terms. and the removal of David Levi as president and CEO, Clint Matthews as chief financial officer and David Jennings as secretary. The fund has appointed C. Ian Ross as interim CEO.
The fund says will continue to dives its investment portfolio under the oversight of its board of directors.