A British Columbia court has approved a Red Deer-based company’s proposal to its creditors.
Diversified Industries Ltd. (TSXV: DVS) made the proposal under the Bankruptcy and Insolvency Act in December after confirming it could no longer meet its financial commitments.
Trade in the company’s shares on the TSX Venture exchange was suspended on Jan. 6, after Diversified was late in filing its annual audited financial statements and related documents.
On Monday, a Supreme Court of British Columbia judge approved Diversified’s proposal, which will result in the claims of preferred creditors and other proven claims up to $6,000 being satisfied.
The company will also sell its assets, including its 50 per cent interest in CFR Chemicals Inc. of Red Deer, to CFR Chemicals. That would leave No. 321 Cathedral Ventures, which owns the balance of CFR Chemicals’ shares, with full ownership of the company.
CFR Chemicals distributes process and production chemicals, primarily to the oil and gas industry.
It has tankage facilities west of Sylvan Lake at Kuusamo, as well as a branch office at Grande Prairie, a research and development lab and an office in Edmonton, and distributors at Edson, Hinton, Fox Creek, Brooks, Vauxhall, Medicine Hat, Stettler, Viking, Taber and Fort St. John, B.C.
Officials with CFR Chemicals said previously that the company has continued to operate and its outlook is bright.
A news release issued by Diversified on Tuesday said creditors have until Feb. 7 to submit a proof of claim form to its trustee, G. Powroznik Group Inc., of G-Force Group.
The terms of its proposal are expected to be completed by the end of February, at which time Diversified’s only remaining material assets will be tax-related.
Meanwhile, Diversified last week filed its financial statements for the year ended Aug. 31, 2010.
These indicated losses of $2.3 million on revenues of $23.2 million, as compared $1.7 million in losses and $16.8 million in revenues the previous year.
The company said it is filing the required forms for reinstatement to the TSX Venture exchange.