tec_8k-80602.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): May 30, 2008
|
TORRENT
ENERGY CORPORATION
|
(Exact
name of registrant as specified in its charter)
|
Colorado
|
000-19949
|
84-1153522
|
|
(State
or other jurisdiction of incorporation )
|
(Commission
File Number)
|
(I.R.S.
Employer Identification No.)
|
|
|
|
|
|
One
SW Columbia Street, Suite 640
Portland,
Oregon 97258
(Address
of principal executive offices)
|
|
|
(503)
224-0072
|
|
|
(Registrant's
telephone number, including area code)
|
|
|
|
No
Change
(Former
name or former address, if changed since last
report)
|
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
As a
result of its decision to file a voluntary petition for reorganization under
Chapter 11 of Title 11 of the United States Code, 11 U.S.C. 101 et seq. (the “Bankruptcy Code”), as
described in Item 1.03 below, on May 30, 2008, Torrent Energy Corporation (the
“Company”)
exercised its right to terminate the Amended and Restated Engagement Letter,
dated as of February 15, 2008, by and between the Company and Gordian Group, LLC
(the "Engagement
Letter"). Pursuant to the terms of the Engagement Letter,
either party had the right to terminate with or without cause upon written
notice to the other party. Under the terms of the Engagement Letter,
the Company remains liable for the transaction fees (as defined in the
Engagement Letter and described in the Current Report on Form 8-K filed with the
Commission on February 22, 2008) payable or accrued and expenses incurred prior
to termination of the Engagement Letter. The Engagement Letter
further provides for the payment of the transaction fees upon the Company's
entering into certain financial transactions, as specified in the Engagement
Letter, within twelve months of the termination of the Engagement
Letter.
Item
1.03 Bankruptcy or
Receivership.
On June
2, 2008, the Company commenced Chapter 11 Case No. 08-32638 (the “Borrower’s Case”) by
filing a voluntary petition for reorganization under the Bankruptcy Code, with
the United States Bankruptcy Court for the District of Oregon (the “Bankruptcy
Court”). Each of Methane Energy Corp. and Cascadia Energy
Corp. (together, and collectively with the Company, the "Debtors"), the
Company's subsidiaries, commenced a case under Chapter 11 of the Bankruptcy Code
on the same day (such cases, together with the Borrower’s Case, the “Chapter 11
Cases”). The Debtors continue to operate their businesses and
manage their properties as debtors-in-possession pursuant to Sections 1107(a)
and 1108 of the Bankruptcy Code.
Forward
Looking Statements
This
report contains certain “forward-looking statements” that are made pursuant to
the “safe harbor” provisions of the Private Securities Litigation Reform Act of
1995. Such forward-looking statements, particularly those statements
regarding the proposed Plan of Reorganization and those preceded by the words
“believes,” “expects,” “estimates,” “anticipates,” “will” or words of similar
import are statements of management’s opinion. These statements are
subject to certain assumptions, risks, uncertainties and changes in
circumstances. Actual results may vary materially from those expressed or
implied from the statements herein. Factors that might cause such a
variance include the effects of the Chapter 11 filing, the ability of the
Company to continue to operate its business and maintain adequate liquidity and
the uncertainty of the approval of the Plan of Reorganization. For
example, although the Company anticipates entering into the DIP Credit Agreement
and the Company anticipates conducting a Rights Offering, there is no assurance
that the Bankruptcy Court will approve the Plan of Reorganization, including the
DIP Credit Agreement and/or the Rights Offering, or that certain other
conditions to the DIP Credit Agreement or conditions to Rights
Offering will be satisfied. These and other risks are or will be
detailed from time to time in the Company's periodic reports filed with the
Securities and Exchange Commission. More detailed information about
risk factors that may affect the Company's actual results is set forth in
filings by the Company with the SEC on Forms 10-K, 10-Q and 8-K, including the
amended annual report on Form 10-K filed by the Company on February 25,
2008. Readers are cautioned not to place undue reliance on these
forward-looking statements, which reflect management’s opinions only as of the
date of this communication. Except as required by law, we undertake no
obligation to publicly update or review any forward-looking statements to
reflect events or circumstances that may arise after the date of this
report.
The
Company is party to an Investment Agreement, dated as of June 28, 2006 (the
"Investment
Agreement"), with YA Global Investments, L.P., formerly Cornell
Capital Partners, L.P., ("YA Global") pursuant to which the Company issued
to YA Global 25,000 shares of Series E Convertible Preferred
Stock. On June 1, 2008, the Company failed to make a mandatory
redemption payment required under the terms of the Investment Agreement and
related transaction documents. Pursuant to the terms of the
Investment Agreement and related transaction documents, each of (i) the failure
to make such payment, and (ii) the commencement of the Chapter 11 Cases,
constitutes an Event of Default, upon which YA Global may require the Company to
redeem all or any portion of its Series E Preferred Shares. As
previously disclosed in the Company's current report on Form 8-K filed with the
Commission on February 14, 2008, YA Global has already demanded that the Company
redeem all of YA Global's shares of Series E Convertible Preferred Stock for the
full liquidation amount, plus accumulated and unpaid dividends thereon, in the
aggregate amount of $22,491,147.
On May
15, 2008, the Company executed a short-term promissory note in the amount of
$207,854 (the "Note") in favor of YA
Global, due June 5, 2008. Pursuant to the terms of the Note and
related documents, the Company's failure to make the mandatory redemption
payment required under the terms of the Investment Agreement constitutes an
Event of Default under the Note and related documents, upon which YA Global may
declare all obligations outstanding under the Note immediately due and
payable.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
| |
TORRENT
ENERGY CORPORATION
|
|
| |
|
|
|
|
Date: June
2, 2008
|
By:
|
/s/ Peter
J. Craven |
|
| |
|
Peter
J. Craven |
|
| |
|
Chief
Financial Officer |
|
| |
|
|
|