Northern Star Mining Corp. (CVE:NSM) (PINK:NSMSF) stock was halted by the Investment Industry Regulatory Organization of Canada (IIROC) after the company declared bankruptcy.
NSM stock price quickly went down 50% as traders jumped the sinking boat. Those who failed to get rid of the stock will have to sit through the bankruptcy procedures as the stock cannot be traded as of January 25, 2011. Officially the reason for halting was ‘pending news’.
On Monday, both the controlling entity and a subsidiary Jake Resources Ltd. were deemed bankrupt as the management didn’t file a proposal under the Bankruptcy and Insolvency Act and decided not to seek further extension of the period in which it can be filed.
All the officers and directors have already resigned, leaving the company in the hands of a trustee Deloite & Touche Inc.
The latest filings depicted a grim financial situation of the company. Liabilities topped assets and million in net losses every quarter further aggravated the situation. Even with the a recent drop in price, the market cap remains $3.5 million. Existing shareholders obviously won’t be paid such an amount as the creditors, theoretically, can take away all assets worht. At best people owning NSM stock can hope to receive minimal compensations.
