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by Mike Caswell

Lignol Energy Corp. is a defendant in a lawsuit filed in the Supreme Court of British Columbia by its largest creditor, Difference Capital Financial Inc., over a $13-million debt. Difference Capital claims that Lignol has defaulted on the debt, and it is seeking possession of all Lignol's assets. The assets include shares Lignol holds in two Australian companies (worth about $7.1-million). The lawsuit also asks that the court appoint a receiver-manager for Lignol.

The allegations are contained in a notice of claim that Difference Capital filed at the Vancouver courthouse on Friday, Aug. 22. According to the suit, Difference Capital provided credit to Lignol in various forms up until November, 2013. The amount owing on July 31, 2014, was $13.08-million, with interest building at 9 per cent per year, Difference Capital claims.

As security for the debt, Difference Capital holds a charge over all the shares that Lignol owns in several companies, the suit states. Among them are Australian Renewable Fuels Ltd., which trades on the Australian Stock Exchange. (The shares are worth $5.9-million, according to Lignol's Jan. 31, 2014, balance sheet.) Also on the list is Lignol's shares in Neutral Fuels (Melbourne) Pty. Ltd. (worth $1.2-million, according to the balance sheet.)

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