Fortress Energy Inc.
TSX : FEI

Fortress Energy Inc.

March 02, 2011 17:34 ET

Fortress Energy Inc: Press Release

CALGARY, ALBERTA--(Marketwire - March 2, 2011) - Fortress Energy Inc. ("Fortress" or the "Company") (TSX:FEI) announced today that it applied to the Court of Queen's Bench of Alberta for an Order under the Companies' Creditors Arrangement Act (Canada) staying all claims and actions against the Company and its assets and allowing the Company to prepare a plan of arrangement for its creditors if necessary. The Order was granted and is in effect until March 31, 2011, at which time the matter will be reviewed by the Court. While the Order is in effect the Company will work with a court appointed monitor, Hardie & Kelly Inc. Further information in connection with the proceedings can be found on their website at www.relieffromdebt.ca/index.php/Current-Engagements.html.

Fortress has taken this step to enable Fortress to challenge a reassessment issued by the Canada Revenue Agency (the "CRA"), which reassessment is in the amount of approximately $18 million. As a result of the reassessment, if the Company took no action, it would be compelled to immediately remit $9 million to the CRA and the Company does not have the necessary funds to remit. Other than the claim by CRA, Fortress has $18 million of assets in excess of its liabilities with sufficient liquid assets to pay all other liabilities and trade payables. Fortress believes that the CRA's position is not sustainable and intends to vigorously dispute the CRA's claim.

On February 18, 2011, Fortress announced that it did not meet the listing requirement of the TSX by virtue of the sale of substantially all of its oil and gas assets on September 1, 2010. On February 25, 2011 Fortress was notified by the TSX that trading on the TSX would cease on March 31, 2011. Fortress has commenced discussions regarding listing on the TSX Venture Exchange and both exchanges have indicated cooperation to ensure a seamless transition to ensure no disruption of trading. In light of the Order, Fortress is uncertain as to the status of trading on either the TSX or the TSX Venture Exchange.

Caution to Reader

This news release contains forward-looking information including potential success in disputing the CRA reassessment and listing on the TSX Venture Exchange. The reader is cautioned that the Company may not be successful in its challenge. If it is unsuccessful, the financial ramifications to the Company would be severe, as the Company does not have the necessary funds to remit, and the Company would be unlikely to continue as a viable entity. There can be no assurance that the Company will be listed on the TSX Venture Exchange. The common shares of Fortress have not and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold in the United States or to any U.S. person except in certain transactions exempt from the registration requirements of the U.S. Securities Act and applicable state securities laws. This press release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

Contact Information

  • Fortress Energy Inc.
    Mr. J. Cameron Bailey
    President and Chief Executive Officer
    (403) 398 3345 ext 2450
    (403) 398-3351 (FAX)
    cbailey@fortressenergy.ca
    or
    Fortress Energy Inc.
    Jocelyn Tochor
    Corporate Analyst
    (403) 398 3345 ext 2450
    (403) 398-3351 (FAX)
    jtochor@fortressenergy.ca