Facedrive Reportedly Mulls Filing For Bankruptcy Under CCAA
The problem with eviscerating some of your largest shareholders is that eventually, they’re probably going to get even. Facedrive (TSXV: FD) found this out the hard way this morning, with Imran Khan, a co-founder of the company, revealing he has received notice that the company is looking to hold an initial hearing under the Companies Creditors Arrangement Act in mid to late September.
Effectively, Facedrive is reportedly considering filing for bankruptcy.
Khan, whom co-founded the company in 2016, notably came under direct attack on Saturday when Sayan Navaratnam, the formed Chairman and CEO of Facedrive, issued a public letter blaming Khan for all the shortcomings of the company despite him no longer being involved in management. Navaratnam effectively said that Khan’s selling of his position is the reason the company is failing, saying that Khan’s selling “put his own interests ahead of those of Facedrive’s investors, employees and partners.”
The recent cratering of the equity has been so damaging that notably, on September 1, the company freed its other investors from lock-up periods, likely because of unrest amongst them. At least, this is what they blamed the lock up on.
With the blame for the firms failure placed firmly on Khan’s shoulders, he issued a statement this morning, followed by revealing that his lawyer has been asked about his availability for a “initial hearing in a liquidating proceeding for Facedrive under the Companies’ Creditors Arrangement Act (“CCAA”).” A final decision on the filing however has reportedly not be made.
Whether this was a move to try to stop Khan’s selling due to holding privileged information, or a result of a genuine look into filing for bankruptcy, is anyone’s guess. If its the former, with the private information now public, it seems ineffective and more damaging than anything, if the latter, well, it appears the cat is now out of the bag.
The latter would certainly explain the departure of executives last week.
Facedrive last traded at $2.37 on the TSX Venture.
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As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.