CO2 Solutions announces intent to file for bankruptcy
September 19, 2019
By CO2 Solutions Inc.
CO2 Solutions Inc. announced today that it has filed a notice of intention to make a proposal pursuant to the provisions of Part III of the Bankruptcy and Insolvency Act (Canada). Pursuant to the Notice, Ernst and Young Inc. (E&Y) has been appointed as trustee and will assist CO2 Solutions in its restructuring efforts.
The filing of the Notice follows the review of the corporation’s strategic alternatives by a committee of its board of directors formed of all the independent directors of the board (the Special Committee), further to the announcement, on Feb. 28, 2019, of significant cost overruns in connection with the completion of the CO2 capture unit located at the pulp mill of Resolute Forest Products in Saint-Félicien, Que. At the recommendation of the Special Committee, the board of directors of the corporation determined it would be in the best interest of the corporation and all of its stakeholders for the corporation to seek protection from its creditors, given the corporation’s current financial position. While under protection, the corporation, with the support of the Special Committee and under E&Y’s supervision, will continue with its efforts to pursue strategic alternatives. There can be no assurance that the strategic process will result in the realization of any specific transaction or agreement. The corporation does not plan to make future comments about the status of this strategic process unless there are material developments.
Robert Manherz resigned from the Board of Directors of the corporation in the context of the filing of the Notice because he is a significant secured creditor of the corporation.
As a consequence of the filing, all recourses by the unsecured creditors of the corporation will be stayed for an initial 30-day period (which may be extended by the court), which will protect CO2 Solutions and its assets from claims from its creditors while it pursues its restructuring efforts.
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