Investment firm’s bid for Shermag rejected
By Michael J. Knell -- Furniture Today, April 6, 2009
SHERBROOKE, Quebec — The Superior Court of Quebec has rejected a bid by Geosam Investments Ltd. to take over full-line furniture producer and importer Shermag.
On April 3, Shermag obtained an order from the court extending its bankruptcy protection until July 13. Shermag sought protection under the Companies Creditors Arrangement Act in May of last year.
Geosam’s president, George Armoyan, resigned from Shermag’s board of directors after the court’s decision on Geosam’s takeover bid was made public.
In March, Shermag sought the court’s permission to cancel all of its stock and issue new shares to Geosam for funds it would invest in a restructuring plan. This would have given the Toronto-based investment firm control of Shermag.
Geosam acquired Shermag’s credit facilities from Wachovia Finance (Canada) last July and since then has funded Shermag’s business operations and its restructuring process.
Armoyan, the owner of Geosam and the largest shareholder in Shermag, joined Shermag’s board in mid-2007 to replace then-president and CEO Jeff Casselman. In a statement, Shermag said Geosam “fully supports the company and continues to work closely with management to conclude Shermag’s restructuring process as quickly as possible. Shermag will make known the next steps of its restructuring process in the near future.”
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