TORONTO, April 13 (Reuters) - A Canadian court on Friday extended a creditor protection order for Sino-Forest Corp by five weeks to June 1, giving the embattled Chinese forestry company more time to sell its assets.
Justice Geoffrey Morawetz of the Ontario Superior Court declined the Toronto-listed company’s request for an extension until July 9 but agreed to leave the order in place for about a month beyond the initial April 29 expiry.
Sino, accused of fraudulently exaggerating the size of its forestry assets, says the allegations against it have paralyzed its business.
“I am satisfied that the applicant is working in good faith,” said Morawetz, adding that the court would consider a further extension after it weighs other motions, including those in a related shareholder lawsuit.
Sino-Forest’s shares tumbled last June after short-seller Carson Block and his firm Muddy Waters accused it of swindling investors. Sino is now battling multiple lawsuits, on top of investigations from regulators and law enforcement authorities.
The company’s stock, which has been halted by regulators for months, is now being delisted by the Toronto Stock Exchange in the wake of the bankruptcy protection proceedings.
As part of a move to extract value for creditors, Sino plans to raise cash by selling its largely Chinese forestry assets.
Sino’s lawyers said in court the company had started putting its assets up for sale and that the extension of the stay period would provide stability to Sino-Forest’s business while it works through the sale process.