Arrest puts Peace Arch filing on pause

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Related story: Peace Arch's Howsam pleads not guilty

TORONTO -- Canadian producer Peace Arch Entertainment is delaying the filing of its fiscal 2007 financial statements thanks to an internal audit following the Nov. 5 arrest of former CEO Gary Howsam. The move technically puts the company in default of its financial reporting covenant.

Peace Arch COO John Flock on Monday said the company now intends to file its year-end results with the Ontario Securities Commission on Thursday, followed by an analyst call.

Toronto-based Peace Arch was to have filed the results for the year ending Aug. 31 by Nov. 29.

The delay follows the arrest of Howsam in Los Angeles on an alleged bank fraud charge. Former CBS Entertainment president and Peace Arch shareholder Jeff Sagansky subsequently replaced Howsam as interim CEO.

Sagansky said in a statement that recent management changes and the redefining of the company's business model has required auditors to take longer to complete an internal probe.

As part of its statutory obligations, Peace Arch warned that failure to file its financial statements on or before Jan. 29 could lead the OSC to order a halt to Peace Arch share trading on the Toronto Stock Exchange.
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