Coventree Announces Date for Commencement of Winding Up

    




 /THIS PRESS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY./ 

 NEX Symbol: COF.H  

 TORONTO, Jan. 25, 2012 /CNW/ - Coventree Inc. (NEX: COF.H) ("Coventree"  or the "Company") today announced that the Board of Directors of the  Company has determined that the winding up of the Company will commence  on or about February 15, 2012. 

 At the annual and special meeting of shareholders of Coventree held on  June 30, 2010, the shareholders approved a special resolution  authorizing the winding up of the Company and the distribution of its  remaining assets, if any, to shareholders pursuant to the plan of  liquidation and distribution (the "Liquidation Plan") attached as  Schedule A to the Company's management information circular dated May  25, 2010.  The Liquidation Plan provides that it will become effective  on a date to be determined by the Company's Board of Directors.  The  Board has determined that the effective date, being the date on which  the winding up will commence in accordance with the Liquidation Plan,  will be on or about February 15, 2012 (the "Effective Date"). 

 On the Effective Date, the Board of Directors of the Company will be  deemed to have resigned, and Duff & Phelps Canada Restructuring Inc.  (being the successor of RSM Richter Inc.) will be appointed the  liquidator of the Company (the "Liquidator") for the purpose of winding  up its affairs.  In addition, Geoffrey Cornish and Wesley Voorheis will  be inspectors of the Company's liquidation. 

 The Company expects that, as soon as reasonably practicable following  the Effective Date, the Liquidator will apply to the Superior Court of  Justice (Ontario) (the "Court") to have the winding up supervised by  the Court and to seek the Court's approval to establish a process for  the identification, resolution and barring of claims against the  Company and its directors and officers, both past and present.  The  Company expects that, if approved by the Court, the date by which all  claims must be filed will be in March or April, 2012 (the "Claim Bar  Date").  Shortly after the Claim Bar Date, the Company intends to make  an initial interim distribution to shareholders in an amount equal to  the remaining assets of the Company, less the sum of (a) an amount  required to pay claims against the Company that were filed on or before  the Claim Bar Date, (b) an amount set aside or reserved to pay claims  against the Company that remain outstanding following completion of the  claims process, (c) an amount required to pay costs to be incurred  during the winding up process, and (d) an appropriate contingency.   Claims that may be filed on or before the Claim Bar Date may include:  the claim made by Dean Tai and certain corporations affiliated with him  relating to the cancellation in April 2009 of certain Coventree shares  that were issued to him under Coventree's 2005 Share Allocation Plan;  claims made by Canada Revenue Agency relating to taxes including claims  relating to tax filings made by one of Coventree's subsidiaries for  2007; and other claims currently not known to the Company.  Additional  distributions to shareholders may be made as the winding up process  evolves. 

 There can be no assurances as to the number of claims that may be filed  on or before the Claim Bar Date and the monetary amount of such  claims.  Accordingly, there can be no assurances regarding (a) the time  required to complete the claims process including to resolve any claims  that may be filed in accordance with that process; (b) the amount that  will be required to pay or make provisions for claims against and the  obligations of the Company; and (c) the timing, amount or form of  distributions to be made to shareholders of the Company in connection  with the winding up.  A number of factors, some of which are beyond the  control of the Company, will affect the timing of, or the amount of  funds available for distribution upon, the winding up of the Company,  including the fact that such matters are subject to the approval of the  Liquidator and the Court. 

 The Liquidation Plan contemplates that Coventree's common shares will  continue to be listed and traded on NEX after the Effective Date.   However, the continuation of the listing after the Effective Date is  subject to the approval of NEX.  In that regard, the Company has had  discussions with NEX and intends to make a formal application to NEX to  maintain the listing of its common shares until the completion of the  claims process.  However, there can be no assurance that NEX will  approve that application and, as a result, there is a risk that  Coventree's common shares will be delisted and cease traded on NEX on  the Effective Date.  Even if NEX approves the application to continue  the listing beyond the Effective Date, the Company expects that its  shares will be delisted and cease traded on NEX shortly after the  completion of the claims process. 

 The foregoing description of aspects of the Liquidation Plan is  qualified in its entirety by the more detailed information set out in  the Company's management information circular dated May 25, 2010,  including, without limitation, the text of the Liquidation Plan which  is attached thereto as Schedule A. 

 Other Updates   

 Coventree also announced that Geoffrey Cornish and Dean Tai, who were  also parties to the proceeding commenced against the Company by the  Ontario Securities Commission (the "OSC"), have decided personally to  appeal the OSC's ruling that they violated Ontario's securities laws.  Coventree previously announced that it will not appeal the OSC's  decision.  Coventree has entered into an agreement with Mr. Cornish to  limit the amount of legal fees and other costs related to such appeal  for which Coventree is responsible under its indemnity agreement with  him and to otherwise ensure that the interests of Coventree are not  prejudiced by such appeal.  Mr. Cornish has agreed that Coventree's  liability to indemnify him for legal expenses and other costs or awards  arising from the appeal will be limited to $725,000.  The Company has  agreed to support Mr. Cornish in his appeal but will not participate in  it.  There is no similar agreement with Mr. Tai.  

 In another matter, Coventree announced that the Board of Directors  authorized the Company to take appropriate steps to recover the amounts  owing to the Company by certain companies owned by Mr. Tai.   Previously, the Company disclosed that loans totaling approximately  $1.62 million as at December 31, 2011 that are owed by Mr. Tai's  companies to Coventree are now in default.  Mr. Tai's companies have  pledged 500,000 shares of Coventree as security for those loans.  In  order to recover the amounts owing, the Board of Directors authorized  the sale in the market of the 500,000 Coventree shares pledged by those  companies and authorized Coventree to enter into such agreements or  other arrangements with third parties as may be necessary or  appropriate to facilitate such sale. 

 Forward-Looking Statements   

 This press release includes certain forward-looking statements relating  to the Company's expectations that the Liquidator will apply to the  Court to, among other things, supervise the winding up and establish a  claims process; the timing of the completion of the claims process; the  amount that the Company will be required to pay or make provision for  claims against and the obligations of the Company following the claims  process; the timing, amount and form of any distributions to be made by  the Company to shareholders as part of the winding up; and the  Company's intention to apply for the continued listing of its common  shares on NEX after the Effective Date.  These statements can be  identified by the expressions "will", "expects" and "intends". These  forward-looking statements are not historical facts but reflect  Coventree's current expectations regarding future events based on  information currently available to Coventree. 

 These forward-looking statements are subject to a number of known and  unknown risks, uncertainties and assumptions which may be substantial.  Many factors could cause actual results or events to differ materially  from current expectations that may be expressed or implied by such  forward-looking statements, including, without limitation, the various  matters discussed under "Risks and Uncertainties" contained on pages 10  to 12 of the Company's Management Discussion and Analysis for the year  ended September 30, 2011 which is available under the Company's profile  on SEDAR at www.sedar.com. Should one or more of these risks or  uncertainties materialize, or should assumptions underlying the  forward-looking statements prove incorrect, the Company may not be able  to wind down its operations or implement a formal winding up of the  Company in the near future or at all; and the amount of funds available  to be distributed to shareholders pursuant to such a winding up could  be significantly reduced and/or the timing of the distribution of such  funds could be significantly delayed. These factors should be  considered carefully and prospective investors should not place undue  reliance on the forward-looking statements. These forward-looking  statements are made as of the date of this press release and Coventree  does not intend, and does not assume any obligation, to update or  revise these forward-looking statements, except as required by law. 

 This press release is intended for distribution in Canada only. 

 Neither TSX Venture Exchange nor it Regulation Services Provider (as  that term is defined in the policies of the TSX Venture Exchange)  accepts responsibility for the adequacy or accuracy of this release. 

  


  



Coventree Inc.


CONTACT:  Craig Armitage, The Equicom Group Inc.Tel: [phone] x278Email: [e-mail] -or-Ani Hotoyan-Joly, Coventree Inc.Tel: [phone]Email:  [e-mail] 


    

Copyright