New Cease Trading Order In Mount Real Case

Securities Decisions and Freeze and cease trade orders

Montréal – The Bureau de décision et de révision en valeurs mobilières (BDRVM) yesterday issued a court order that “[translation] prohibits all solicitation and securities transactions by the Mount Real Corporation, Gestion MRACS ltée (MRACS), Real Vest Investments Ltd (Real Vest) and Real Assurance Acceptance Corporation (RAAC), particularly previously issued promissory notes, including exchange, conversion and disposal of said securities.”

The decision follows the sending of a reorganization plan by trustee Allard et associés inc. to each noteholder in order to allow Mount Real Corporation, Real Vest, MRACS and RAAC to resume trading.

The court’s intervention was requested by the Autorité des marchés financiers (AMF), which believes that the reorganization plan incites noteholders to carry out extremely complex transactions based on misrepresentations, counter to the law and the basic rules of securities investments established to protect the public.

The AMF also believes that, in its current form, the reorganization plan contradicts the BDRVM order dated November 9, 2005, which forbade the targeted parties from divesting themselves of funds, securities and other assets in their possession.

Lastly, the AMF believes the reorganization plan to be neither viable nor realistic, and to compromise the application of the provisional administrator’s recommendations.

In its decision, the BDRVM acknowledged the facts put forth by the AMF as sufficiently troubling to justify court intervention.

The Autorité des marchés financiers (AMF) is the regulatory and oversight body for Québec’s financial sector.

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