JED Oil secures CCAA creditor protection

By Caroline Salls

Pittsburgh, Aug. 14 - JED Oil Inc. and wholly owned subsidiaries JED Production Inc. and JED Oil (USA) Inc. have obtained creditor protection under the Companies' Creditors Arrangement Act (Canada) through a Wednesday ruling from the Court of Queen's Bench of Alberta, Judicial District of Calgary, according to a company news release.

According to the release, JED and its board of directors decided that it was in the best interests of the company and its stakeholders to file for CCAA protection after a group of the company's trade creditors asked the court to declare the company under protection and the holders of JED's 10% senior subordinated convertible notes raised the possibility of placing the company in receivership.

As previously reported, CCAA protection stays creditors and others from enforcing rights against the company and affords it the opportunity to restructure its financial affairs.

In Wednesday's order, the court granted JED initial CCAA protection through Sept. 15. After that, the court can extend the protection period if it deems appropriate.

If the company has not filed a plan of arrangement or obtained an extension of the CCAA protection by Sept. 15, the company's creditors will no longer be stayed from enforcing actions.

Ernst & Young Inc. has been appointed as JED's monitor. The monitor will be responsible for reviewing the company's ongoing operations, helping the company develop and file the plan, meeting with creditors and other stakeholders and reporting to the court.

Meanwhile, JED's board of directors and management will be primarily responsible for formulating the plan for restructuring the company's affairs. The board of directors will maintain its usual role and the company's management will still be responsible for the day-to-day operations of the company, the release said.

Although the company is still developing its plan, JED said it has already taken steps to dispose of enough assets to redeem the 10% notes and to pay its trade creditors in full.

In addition, JED said the CCAA order extends the bid deadline for the sale of the Steen assets by CB Securities Inc. to Sept. 24 from Sept. 17 and the closing deadlines by two weeks to Nov. 15 if shareholder approval is not required for the sale or to Dec. 8 if it is required.

JED Oil is an oil and natural gas company that is based in Didsbury, Alta.

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