Legend Oil and Gas Ltd. says that on September 19, 2014, Legend Oil and Gas, Ltd. has placed its wholly owned subsidiary, Legend Energy Canada, Ltd. (a Canadian company, "LEC"), into an Assignment for the General Benefit of Creditors in the Court of Queen's Bench in Bankruptcy and Insolvency, Province of Alberta, Canada, for relief under the Bankruptcy and Insolvency Act of Canada. It has named KPMG, Inc. of Canada as the Trustee.
"We have proceeded in a strategic manner to place LEC into bankruptcy. LEC's assets historically did not produce the operating or financial results that Legend's prior management team had anticipated, which significantly encumbered both LEC and Legend, as LEC's parent company. Further, the majority of the assets were taken into receivership by the National Bank of Canada in April of 2014, leaving the balance sheet at LEC with essentially nothing but liabilities." stated Chief Financial Officer, Warren Binderman. "The process we followed to place LEC into bankruptcy commenced with Legend negotiating and obtaining a full release earlier this quarter, of all Legend's obligations under certain bank debt LEC incurred with the National Bank of Canada ("NBC"). This full release gives Legend the flexibility and ability to move forward, unencumbered by these obligations which had been hanging over our heads, and limiting our ability to obtain further funding to enhance operations."