Oilsands Quest Inc., which explores for oil in sand deposits in western Canada, is seeking protection from its U.S. creditors and shareholders, Dow Jones Daily Bankruptcy Review reported. Oilsands, which once did business as CanWest Petroleum Corp., sought the protection of a Canadian court last November. The Calgary, Alberta, company is now asking the U.S. Bankruptcy Court in Manhattan to recognize the Canadian proceeding and extend its protection to the company in the U.S., where it faces three shareholder lawsuits.

Canadian foamer Domfoam International Inc. has filed for bankruptcy protection in the US after flagging sales and a million-dollar fine over price-fixing led the company into insolvency, PlasticsNews.com reported. Domfoam filed for Chapter 15 protection in the U.S. Bankruptcy Court in Toledo, where it faced more than a dozen lawsuits over the inflated prices it charged for its foam that goes into carpet underlay, furniture and bedding, according to a report from Dow Jones.

Retailer Hart Stores Inc. said Quebec Superior Court has authorized a filing under the Companies’ Creditors Arrangement Act (CCAA) calling for payments totalling $6 million over three years to monitor RSM Richter Inc., The Montreal Gazette reported. The money would be for distribution to creditors, who can accept their pro-rata share or a lump sum equal to the lesser of the value of their claims or $1,000. A meeting of creditors to vote on the proposal is expected in February. If creditors approve, it will then go to Quebec Superior Court for ratification.

Struggling Catalyst Paper Corp. has received the go-ahead from a court in British Columbia to begin a planned restructuring, while at the same time filing for protection from creditors in the United States, The Globe and Mail reported. The Richmond, B.C.,-based company said Wednesday a B.C. court had issued an initial order under the Canada Business Corporations Act to begin the restructuring process. The plan would see bondholders take control of the firm. It would also reduce its overall debt by $315.4-million and cut annual cash interest payments by $25.5-million.

Moody's Investors Service downgraded Catalyst Paper Corp. on Tuesday after the company signed a deal to significantly cut its debt under a recapitalization plan that will see its bondholders take control of the firm, CanadianBusiness.com reported on a Canadian Press story. The agency downgraded Catalyst to Ca from Caa3 and its senior secured notes to Caa3 to Caa2. The company's senior unsecured notes were downgraded to C from Ca. Under the Moody's rating system, anything less than BBB is considered too risky for conservative fund managers such as pension plans.

Sino-Forest Corp., the Chinese timber company fending off allegations of fraud, said it reached a waiver agreement with bondholders, reducing the risk of bankruptcy, Bloomberg reported. Holders of a majority in principal of its senior notes due 2014 and 2017 agreed to waive the default arising from the company’s failure to release its third-quarter financial results on time, Hong Kong- and Mississauga, Ontario-based Sino-Forest said today in a statement.

Canada’s unemployment rate rose for a third month in December, the longest advance in two years, as a gain in jobs trailed growth of the labor force, Bloomberg reported. The jobless rate increased to 7.5 percent from November’s 7.4 percent and the recent low of 7.1 percent in September, Statistics Canada said today in Ottawa. Employment rose by 17,500, the first gain in three months. Over the past six months, the number of jobs has grown by 7,400, compared with a gain of 191,800 in the first half of 2011.

Homburg Invest Inc. has filed a formal objection to a decision by the Dutch securities regulator to revoke its investment licence in the country, CanadianBusiness.com reported. The Halifax-headquartered company, which is under creditor protection, said Thursday that it plans to consider all legal steps to challenge the decision made in late November which prevents it from issuing new equity in the Netherlands.

Canadian silicon producer Timminco Ltd filed for protection from creditors, after it failed to secure funding and a slump in the market hit the restart of the company's commercial solar-grade silicon production, Reuters reported. The Ontario Superior Court of Justice (Commercial Division) gave an order under the Companies' Creditors Arrangement Act, granting the company protection till Feb. 2, Timminco said in a statement. Becancour Silicon Inc, a unit of Timminco also filed for protection.

Natural and organic bedding producer Natura World said yesterday that it has filed a notice of intention to restructure its business under Canada's Bankruptcy and Insolvency Act, and has reached an agreement with its lender to provide C$7.8 million in new financing, FurnitureToday.com reported yesterday. The company said that the financing from Callidus Capital of Toronto will create an opportunity for Natura to solidify its position as a natural and organic sleep products brand. The company said there will be no disruption of service to its customers, vendors or suppliers.