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Brainhunter Inc. (TSX: BH) said today it will seek court protection as it works to restructure or sell its business. The Toronto-based firm also announced it received a stalking horse bid from its CEO, Raj Singh.
The company provides information technology and engineering staffing and services. It ranked No. 7 on Staffing Industry Analysts' list of largest Canadian staffing firms with 2008 Canadian staffing revenue of C$225.0 million (US$184.0 million).
Brainhunter said the filing will ask for a stay of proceedings against the firm and allow it to continue operating normally. The filing was made under Canada's Companies' Creditors Arrangement Act.
The company said it has been financially challenged by the economic downturn. "We regret that this could not be resolved outside the scope of a Companies' Creditors Arrangement Act process," said Chairman Don McCreesh. "However, we believe that a court-supervised process is the best course of action and will clear the way to implement a long-term, viable solution."
The CEO's stalking horse bid is effectively an offer to acquire the company, serving as a reserve bid against which others can also bid for the firm, Brainhunter reported. It ensures "at least one viable and expedited outcome from the restructuring process and the continuation of the company's business without disruption of service to its clients," according to the company.
Brainhunter proposed the court appoint Deloitte & Touche Inc. as a monitor to provide oversight and supervise the Companies' Creditors Arrangement Act process.