Sofame Technologies Inc.: Reorganizing for Growth

In late 2015, the chairman of Sofame Technologies Inc. (Sofame), a Montreal-based manufacturer and marketer of energy-recapture systems, faced a dilemma. The firm, which transformed the waste heat generated by hot water and exhaust gases into usable energy, had struggled for more than a decade as it coped with low gas prices and a failed carbon credits management subsidiary. Sofame had just been delisted from the stock market and was precariously close to bankruptcy. However, the chairman continued to see value in Sofame and was considering a restructuring plan that involved the acquisition of a New York–based boilermaker that could save the firm. In addition to the financial viability of the acquisition and the difficulty of raising funds, he also needed to consider other issues, including the fact that, as the chairman of a Canadian Crown corporation, he could not preside over a firm undergoing the bankruptcy process.