Coventree Provides Update on OSC Decision

    




 NEX Symbol:  COF.H 

 TORONTO, Oct. 14, 2011 /CNW/ - Coventree Inc. (NEX: COF.H) ("Coventree" or the "Company") today  provided a further update regarding the previously announced decision  issued by the Ontario Securities Commission ("OSC") on September 28,  2011 in the proceeding commenced by OSC staff against Coventree and one  current and one former officer.  The decision is available on the OSC's  website at www.osc.gov.on.ca. 

 In its decision, the OSC concluded that: 




      1. Coventree contravened section 75 of the Securities Act(Ontario)
         (the "Act") by failing to issue a news release and file a material
         change report concerning a material change that occurred as a
         result of a press release issued by DBRS in January 2007 (the
         "DBRS January Release");
      2. Coventree contravened section 75 of the Act by failing to issue a
         news release and file a material change report concerning various
         material changes that occurred by August 1, 2007;
      3. each of the individuals involved, Geoffrey Cornish and Dean Tai,
         authorized, permitted or acquiesced in Coventree's non-compliance
         referred to above and therefore are deemed also to have not
         complied with Ontario securities law; and
      4. the conduct of each of Coventree, Mr. Cornish and Mr. Tai was
         contrary to the public interest.




 The OSC rejected allegations made by staff concerning a prospectus  issued by Coventree in November 2006 and an investor conference held by  Coventree in April 2007. 

 Coventree is continuing to consider its options in respect of the  decision of the OSC, including possible appeals. The next step in the  OSC proceeding, however, is a further hearing to determine what, if  any, sanctions ought to be issued against the Company, Mr. Cornish and  Mr. Tai.  Coventree has been advised that the sanction hearing will be  held on October 26 and 27, 2011. 

 In the notice of hearing and related statement of allegations issued by  OSC staff dated December 7, 2009, OSC staff asked the OSC to consider  whether it would be in the public interest to make a number of orders,  including requiring Coventree and the two individuals to: 




      1. each pay an administrative penalty of not more than $1 million for
         each failure to comply with Ontario securities laws;
      2. each disgorge to the OSC any amounts obtained as a result of
         non-compliance with Ontario securities laws; and
      3. jointly pay the costs of the investigation and the costs of or
         related to the hearing that are incurred by or on behalf of the
         OSC.




 With respect to OSC staff's request for administrative penalties, OSC  staff alleged that, by reason of Coventree's failure to comply with  section 75 of the Act in respect of the DBRS Press Release, Coventree   failed to comply with its disclosure obligations on each day from  January 19, 2007 to August 13, 2007.  OSC staff made similar  allegations of a continuing breach on each day following the occurrence  of a material change on August 1, 2007.  However, in its decision of  September 28, 2011, the OSC held that it would not treat Coventree's  failure to comply with its disclosure obligations with respect to the  DBRS January Release or the events of late July or early August, 2007  as giving rise to further multiple breaches of the Act on a daily basis  from the date of the change onwards. 

 Outlook 

 Under the plan previously approved by shareholders at the Company's June  30, 2010 annual and special meeting relating to the winding up of the  Company and distribution of its remaining assets to shareholders, the  winding up only commences and becomes effective at a time to be  determined by the Company's board of directors.  Previously, Coventree  advised that the board intended to set the effective date as promptly  as reasonably practicable following the final determination of the OSC  proceeding described above (including any appeals or the expiry of the  appeal period, as applicable).  The board intends to consider whether  to authorize the commencement of the winding up following the  determination by the OSC of the sanctions, if any, to be issued against  the Company at the sanctions hearing referred to above.  The timing of  the formal winding up of the Company and the amount and timing of any  distribution of funds to shareholders under such a winding up cannot be  determined at this time. Following the OSC's determination of the  sanctions, if any, to be imposed against the Company, the  Company will  determine whether to make any interim distribution to the Company's  shareholders prior to initiating the formal winding up of the Company.  A number of factors, some of which are beyond the Company's control,  will affect the timing of, or the amount of funds available for  distribution upon, a formal winding up of the Company, including the  timing and outcome of the sanction hearing. For more information  concerning the procedures for winding up the Company, shareholders  should refer to the Company's information circular dated May 25, 2010  in respect of the June 30, 2010 annual and special meeting which is  available on SEDAR at www.sedar.com. 

 With respect to the trading halt that has been in effect since the OSC  decision was released, Coventree has made submissions to the TSX  Venture Exchange to have trading in Coventree shares resume and is  awaiting a response from the TSX Venture Exchange. 

 Forward-Looking Statements 

 This press release includes certain forward-looking statements relating  to the Company's expectations to wind down its operations and to  implement a formal winding up of the Company.  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 three  and nine months ended June 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; 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 the TSX Venture Exchange nor its 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 ArmitageThe Equicom Group Inc.Tel: [phone] x278Email: [e-mail]-or-Ani Hotoyan-JolyCoventree Inc.Tel: [phone]Email: [e-mail] 


    

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