Troubled Chinese timber provider Sino-Forest Corp. (TSE:TRE) Friday filed for court protection from creditors as it put itself up for sale.
The Mississauga-based company said that if it didn't get a suitable offer, it would hand over control to its bondholders.
Sino-Forest, whose shares have been suspended since August last year, once had a market value of more than $6 billion.
The stock came under fire in the summer of 2011 as Hong Kong-based short-seller Muddy Waters Research alleged that it had exaggerated sales and assets.
Shortly after the damaging research note, chief executive Allen Chan departed.
These allegations have not been proven as the company itself and external watchdogs launched probes.
Sino-Forest also launched a defamation suit against Muddy Waters and its principal, Carson Block, claiming damages of $4 billion and the recovery of trading profits made by Muddy Waters.
"We believe the full value of our assets will only be achieved if we are able to continue operating the business, and repair and preserve relationships with our customers and suppliers," the company said in a press release.
"We believe that the CCAA restructuring process is the best method to secure our future and will allow the time and stability required to normalize operations following the allegations made against the company by Muddy Waters."
Sino-Forest filed a report by its own independent committee earlier this year into the allegations by Muddy Waters, but fell short of bringing investors any closer to seeing a return on their investment in the company.
The report left several key questions unanswered including the value of its forestry assets and questions about certain relationships between the company and its suppliers.
The company said at the time, though some issues remain, the work of the committee was "at the point of diminishing returns."
The independent committee's report encountered "numerous challenges in its attempts to implement a robust independent process which would yield reliable results."
The committee pointed to several challenges including China's legal regime for forestry, obtaining information from third parties,
Sino-Forest's small management team and cultural and geographic issues.
Sino-Forest faces shareholder lawsuits in Canada and the U.S. alleging a fraud at the company. Sino-Forest has said it "intends to vigorously defend the action."