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Brainhunter Inc Files For Protection

Brainhunter Inc Files For Protection

Brainhunter Inc. says it has received court approval for protection from its creditors after failing to recapitalize its business as corporate credit options dried up during the economic downturn.

The Toronto-based company said the Ontario Superior Court of Justice granted the company's request for a filing under the Companies' Creditors Arrangement Act. Brainhunter said the filing should allow the company to complete the sale of its operations or a restructure its operations.

Brainhunter already has a "stalking-horse" takeover bid - an offer that sets an initial price for prospective buyers and guarantees at least one bid will be made, from CEO Raj Singh. Financial terms of Singh's offer were not disclosed, but the company has a market value of $1.16 million at its Tuesday closing stock price of 2.5 cents. Trading in the shares was halted before the opening of the Toronto Stock Exchange.

'Brainhunter's success is rooted in the strong relationships with our clients and contractors, and we have asked the court to grant this order so that we may continue to deliver the high level of service our clients have come to expect from us," board chairman Don McCreesh said in a statement.

'We regret that this could not be resolved outside the scope of a Companies' Creditors Arrangement Act process. However, we believe that a court-supervised process is the best course of action and will clear the way to implement a long-term, viable solution."

In concert with the filing, the company said it has secured an interim financing from from TD Bank that will enable it to continue its business. It has proposed Deloitte & Touche Inc. be named its court-appointed monitor to supervise the process.

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