12:59 PM ET 4/11/11 | BusinessWire
Composite Technology Corporation (CTC) (OTC Bulletin Board: CPTC), today announced that it has filed to reorganize under Chapter 11 of the U.S. Bankruptcy Code. Its wholly owned subsidiary, CTC Cable Corporation, the leading producer of high-capacity energy efficient composite core conductors for electric transmission and distribution lines, also has filed for Chapter 11 protection.
The filings, made voluntarily in the U.S. Bankruptcy Court for the Central District of California, are designed to enable CTC and its subsidiary, CTC Cable, to continue to develop, produce and market its ACCC(R) conductor to the utility industry.
CTC's decision to seek bankruptcy protection to protect the viability of the company has been necessitated due to actions taken by its lender last week. On Tuesday, April 5, 2011, our lender served notice of default and accelerated its loan for $10,000,000. On Thursday April 7, 2011, the lender filed an application for an emergency protective legal order which was granted without a hearing on Friday afternoon, April 8, 2011. The court order provides for the companies to immediately send all remaining cash recently released from the escrow containing proceeds from the sale of the wind division in 2009. CTC's attorneys believe that the court had not cited a basis to do so and that the companies dispute the lenders right to freeze the funds. The lender also has attempted to freeze funds in operating accounts using account control provisions from the loan agreement. Unfortunately, chapter 11 offers the only alternative to continue to operate the company without interruption.
During the bankruptcy proceeding, CTC plans to continue operating its business in a normal fashion and timely servicing its customers' needs. We plan to move forward with product sales work and to convince our strategic relationships that this reorganization should allow us to continue to deploy our ACCC(R) conductor product to an industry in great need of solutions for electrical grid systems. |
