By KRYSTLE CHOW
Published on OBJ.ca.
Feb. 7, 2011
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Bankrupt Gatineau firm owes $3M in secured and unsecured debt
Sitebrand.com Inc., the wholly owned subsidiary of Sitebrand Inc. (TSX-V:SIB), is bankrupt following a failed attempt to make an acceptable proposal to its creditors.
The Gatineau-based online marketing technology company, which filed for creditor protection in early December, announced Monday that it has made an assignment in bankruptcy under the provisions of the Bankruptcy and Insolvency Act.
“Sitebrand.com Inc.’s efforts to restructure its business and to make a proposal that would be acceptable to creditors were not successful,” the firm said in a release. “The board of directors of Sitebrand Inc. intends to seek new opportunities for the company and is evaluating its strategic alternatives.”
The company is now in the process of trying to sell off its assets, said Paul Salewski of Doyle Salewski Inc., which is acting as bankruptcy trustee for Sitebrand.com Inc.
“(Sitebrand) put forward a proposal predicated on selling its assets, but it was defeated by the creditors,” said Mr. Salewski in an interview with OBJ.
He added the company has approximately $2.5 million in unsecured debt, including amounts owed to its parent, Sitebrand Inc.
The firm previously announced it owed secured debt of roughly $510,000 to the Business Development Bank of Canada and Caisse Desjardins de Hull. It was supposed to pay $350,000 of that amount by Dec. 23, but in its notice of intention filed Dec. 1 it indicated it had been given a 30-day loan extension.
John Eckert, the chairman of Sitebrand’s board, was unavailable for comment at time of reporting.
Sitebrand, which was founded in 2000, produces technology that personalizes a website’s marketing messages to online visitors’ demographics, with customers including such well-known names as Smashbox Cosmetics, Roots Canada and BMO Financial.
In recent years, the company was plagued with losses that it blamed on the weak U.S. retail market as a result of the downturn in 2008-09. For its third quarter that ended Aug. 31, 2010, it saw top-line revenues dwindle to $288,014 from $462,135 a year earlier, although it managed to narrow its loss to $137,542, from $212,926 in the same quarter in 2009.
At the time, Sitebrand warned there was “substantial doubt about its ability to continue as a going concern,” noting that it had been forced to delay delivery of its key relevance7 software during the quarter.
“Sitebrand had anticipated some variance in revenues due to certain milestones in its software licensing agreement, but did not anticipate the delay in delivering the relevance7 product,” the company’s management discussion and analysis read.
Then in December, CEO Chris Corman announced his departure at the same time as the creditor protection filing announcement. Mr. Corman took over from Sitebrand founder and OBJ Forty Under 40 recipient Justin Shimoon in 2009.