Microtec seeks court protection
November 18, 2004
ST. AUGUSTIN, Quebec - Microtec Enterprises has hit a snag on its road to recapitalization in the form of an uncooperative creditor, forcing it to file for protection under Canada's Companies' Creditors Arrangement Act.
The full-service security provider has made numerous attempts to address the needs of its creditors, who until now have provided the company with five extensions with its credit facilities this year. Daniel Tardif, communications director at the company, said one of its major creditors, GE Capital, has not approved any of the company's plans to improve its situation and that propelled the CCAA filing.
"They had refused the plan that we had," Tardif said. "We have a chance (through the filing) to say to them that's enough. Now give us time and give us what we need to complete our recapitalization plans."
The filing, which according to Jack Mallon, managing director at Mallon Associates, is comparable to a Chapter 11 filing in the United States. But Tardif said the company is not close to hitting that mark.
"We are far from bankruptcy," Tardif said.
But Tardif acknowledged that the company, which has struggled to find solid ground this year as it attempts to reorganize, needs to find a way to address its debt problems.
"We do want and need the necessary cash to lower our debt," he said. Ã¢â‚¬Å“We understand that."
For more on this story, see the December issue of Security Systems News.