The Securities Commission granted an order for Clearford Water Systems Inc. (the Issuer) to no longer be considered a reporting issuer and fully revoked a previous failure-to-file cease trade order (FFCTO). The FFCTO was initially issued due to the Issuer’s failure to file annual financial statements and related documents. Following a reorganization under the Bankruptcy and Insolvency Act, the Issuer sought to revoke the FFCTO and cease being a reporting issuer in all jurisdictions where it held that status.
The Commission’s decision was based on the Issuer’s restructuring, which involved a proposal supported by secured creditors to address the Issuer’s insolvency, a corporate reorganization approved by the court, and the Issuer’s transition to a private company with a limited number of shareholders. The Issuer had no intention of seeking public financing or maintaining a market for its securities.
The Commission concluded that the Issuer met the necessary criteria under the relevant securities legislation, specifically section 144 of the Securities Act (Ontario) for revocation of the FFCTO, and section 1(10)(a)(ii) of the same Act for ceasing to be a reporting issuer. The decision was also informed by National Policies 11-206 and 11-207, which provide guidance on the process for ceasing to be a reporting issuer and revocation of failure-to-file cease trade orders, respectively.
The outcome allowed the Issuer to proceed without the obligations of a reporting issuer and without the restrictions of the FFCTO, reflecting the Issuer’s new status as a private entity with a restructured capital and limited shareholder base.