Composite Technology Files for Chapter 11 Protection to Address Court Order Obtained by Lender
April 11 2011 - 12:59PM
Business Wire
Composite Technology Corporation (CTC) (OTC Bulletin Board:
CPTC), today announced that it has filed to reorganize under
Chapter 11 of the U.S. Bankruptcy Code. Its wholly owned
subsidiary, CTC Cable Corporation, the leading producer of
high-capacity energy efficient composite core conductors for
electric transmission and distribution lines, also has filed for
Chapter 11 protection.
The filings, made voluntarily in the U.S. Bankruptcy Court for
the Central District of California, are designed to enable CTC and
its subsidiary, CTC Cable, to continue to develop, produce and
market its ACCC® conductor to the utility industry.
CTC’s decision to seek bankruptcy protection to protect the
viability of the company has been necessitated due to actions taken
by its lender last week. On Tuesday, April 5, 2011, our lender
served notice of default and accelerated its loan for $10,000,000.
On Thursday April 7, 2011, the lender filed an application for an
emergency protective legal order which was granted without a
hearing on Friday afternoon, April 8, 2011. The court order
provides for the companies to immediately send all remaining cash
recently released from the escrow containing proceeds from the sale
of the wind division in 2009. CTC’s attorneys believe that the
court had not cited a basis to do so and that the companies dispute
the lenders right to freeze the funds. The lender also has
attempted to freeze funds in operating accounts using account
control provisions from the loan agreement. Unfortunately, chapter
11 offers the only alternative to continue to operate the company
without interruption.
During the bankruptcy proceeding, CTC plans to continue
operating its business in a normal fashion and timely servicing its
customers’ needs. We plan to move forward with product sales work
and to convince our strategic relationships that this
reorganization should allow us to continue to deploy our ACCC®
conductor product to an industry in great need of solutions for
electrical grid systems.
About CTC:
Composite Technology Corporation's patented ACCC® conductor
technology enables superior performance of high voltage
transmission and distribution electrical grids. ACCC conductors use
CTC's proven carbon fiber core which is produced by its subsidiary,
CTC Cable Corporation, at its Irvine, California headquarters and
delivered to qualified conductor manufacturers who produce and
distribute ACCC conductors to operators of electrical grids
worldwide. CTC's conductor technology significantly reduces thermal
line sag and can replace similar diameter and weight traditional
conductors with its higher capacity and more energy efficient ACCC
conductor. It is an ideal conductor for both upgrading existing
power lines as well as building new lines since the technology
allows for the reduction of the number of support structures and/or
a reduction of their height. Since its commercial introduction in
2005, ACCC conductor has been selected for over 10,000 kilometers
(6,214 miles) of projects in all environmental and operating
conditions, including severe heat and ice environments, long span
applications and high capacity corridors for the modern grid. ACCC®
is a registered trademark of CTC Cable Corporation.
For further information, visit our website:
www.compositetechcorp.com or contact Investor Relations, James
Carswell, +1-949-428-8500.
This press release may contain forward-looking statements, as
defined in the Securities Reform Act of 1995 (the "Reform Act").
The safe harbor for forward-looking statements provided to
companies by the Reform Act does not apply to Composite Technology
Corporation (the “Company”). However, actual events or results may
differ from the Company's expectations on a negative or positive
basis and are subject to a number of known and unknown risks and
uncertainties including, but not limited to, resolution of pending
and threatened litigation matters involving CTC or its
subsidiaries, resolution of disputes with CTC’s or subsidiaries’
creditors competition with larger companies, development of and
demand for a new technology, general economic conditions, the
availability of funds for capital expenditure and financing in
general by us and our customers, availability of timely financing,
cash flow, securing sufficient quantities of essential raw
materials, timely delivery by suppliers, ability to maintain
quality control, collection-related and currency risks from
international transactions, the successful outcome of joint venture
negotiations, or the Company's ability to manage growth. Other risk
factors attributable to the Company's business may affect the
actual results achieved by the Company, including those that are
found in the Company's Annual Report filed with the SEC on Form
10-K for fiscal year ended September 30, 2010 and subsequent
Quarterly Reports on Form 10-Q and subsequent Current Reports filed
on Form 8-K that will be included with or prior to the filing of
the Company’s next Quarterly or Annual Report.