Calgary, Alberta-based EarthFirst Canada Inc. has obtained creditor protection under the Companies' Creditors Arrangement Act (CCAA) pursuant to an order granted on Nov. 4 by the Court of Queen's Bench of Alberta, Judicial Centre of Calgary.
The CCAA filing follows a review of EarthFirst's strategic alternatives by a special committee of the company's board of directors. EarthFirst's efforts to pursue strategic alternatives has been severely hindered by the unprecedented crisis in the global financial markets, which has impacted its ability to raise financing or to complete a sale of the company.
It was determined by the board of directors that – as a result of EarthFirst's current financial resources and the inability of EarthFirst to complete a fulsome sale process in sufficient time to address its financial condition – seeking CCAA protection would be in the best interests of the company and all of its stakeholders. While under CCAA protection, EarthFirst will continue its day-to-day operations and its efforts to pursue strategic alternatives. EarthFirst further expects that CCAA protection will allow corporations currently engaged in the sale process additional time for due diligence.
EarthFirst has sought protection under the CCAA, as its current cash-in-hand would not allow it to meet its current obligations with respect to the ongoing construction of its 144 MW Dokie 1 wind energy project in British Columbia. CCAA protection stays creditors and others from enforcing rights against EarthFirst and affords it the opportunity to restructure its financial affairs.
The court has granted CCAA protection for an initial period of 30 days expiring Dec. 4, to be extended thereafter as the court deems appropriate. If, by that date, EarthFirst has not filed a plan of arrangement or obtained an extension of the CCAA protection, creditors and others will no longer be stayed from enforcing their rights.
SOURCE: EarthFirst Canada Inc.