On November 14, 2012, Poseidon Concepts Corp. ("Poseidon" or the "Company") released its Q3 2012 Financial Statements which included a write off of approximately $9.5 million for bad debt of the accounts receivable.
On November 27, 2012, a class action lawsuit was commenced in Ontario against Poseidon and certain of Poseidon's officers and directors. Subsequent class action lawsuits were filed in other jurisdictions including the provinces of Alberta and Quebec and in the Southern District of New York, USA.
On February 14, 2013, Poseidon announced that based upon the review of the interim report of the Special Committee and its advisors the Board of Directors determined that, primarily related to the long term take-or-pay agreements: (i) approximately $95 to $106 million (subject to detailed quantification by the Company) of the Company's $148.1 million in revenue for the 9 months ended September 30, 2012 should not have been recorded as revenue in the Company's financial statements; and (ii) as a result of recording the foregoing revenues, approximately $94 to $102 million (subject to detailed quantification by the Company) of the Company's $125.5 million accounts receivable as at September 30, 2012 should not have been recorded in the Company's financial statements as accounts receivable.
As a result of the requirement to restate its financial statements, the Company was in default under its loan agreement and various provincial securities commissions (or their equivalent) issued cease trade orders against the Company.
On April 9, 2013, Poseidon and various affiliates obtained an initial order from the Alberta Court of Queen’s Bench providing creditor protection under the Companies’ Creditors Arrangement Act (Canada) ("CCAA"). As provided for under the initial order, the Company retained a financial advisor who conducted a process to solicit offers for a transaction involving Poseidon's business. Subsequently, Poseidon received creditor protection under Chapter 15 of the United States Bankruptcy Code ("Chapter 15").
On June 24, 2013, Poseidon completed the sale of substantially all of its assets to certain subsidiaries of Rockwater Energy Solutions, Inc. (“Rockwater”) of Houston, Texas. The Alberta Court of the Queen’s Bench and United States Bankruptcy Court have approved the sale of the assets to Rockwater. As a result, Rockwater now legally owns and will operate the assets formerly comprising Poseidon's water storage and containment systems business.
Ongoing Information Regarding Current Status of Restructuring Process and Lawsuits
The net proceeds from the sale are being reported upon by the court appointed monitor, PricewaterhouseCoopers Inc., and will be utilized or released pursuant to current orders of the Courts and such further orders of the Courts as may be granted from time to time. In connection with the CCAA and Chapter 15 proceedings, the Company continues to work on a plan to settle claims identified as part of its restructuring process. The net proceeds from the Sales Transaction will be less than the claims of secured creditors to the Company identified pursuant to the restructuring process.
As of the date hereof, Poseidon no longer has an ongoing business, and as such, this website will no longer be updated.
For additional information on the ongoing restructuring process of Poseidon please visit: www.pwc.com/car-poseidon.
For additional information on the proposed class actions against Poseidon and certain of its officers and directors, please contact plaintiffs’ counsel in those actions. For the Ontario action, please also visit:
Rockwater has no involvement, nor any information regarding any lawsuits involving Poseidon or its directors or officers.
For additional information concerning Rockwater please visit: http://www.rockwaterenergy.com.