Sefton Resources hit by US bankruptcy court claim

Shares in Sefton Resources tumbled after it emerged that former executive chairman James Ellerton had tried to force the company into bankruptcy proceedings.

Ellerton filed an Involuntary Petition under Chapter 7 of the US Bankruptcy Code in the US Bankruptcy Court for the District of Colorado in what Sefton said was an attempt to force it into bankruptcy proceedings.

"The company believes that Mr Ellerton has filed the petition in bad faith, and that the petition is invalid under the US Bankruptcy Code, a view supported by the company's US legal counsel," Sefton said in a statement.

The AIM-listed company, which said its ability to conduct business will not be affected, will move to dismiss the petition and will seek all available remedies under the bankruptcy code, including fees, costs and compensatory or punitive damages.

Sefton, which recently raised funding and reiterated that its remains solvent, is also aggressively defending itself in the federal court in Colorado against other case launched by Ellerton in May.

The federal court has set an initial scheduling conference for 31 August, during which a litigation and discovery plan will be put into place.

Sefton said it fully intended to pursue "all available counterclaims and remedies".

Shares in the company were down 11.7% to 0.08p at 0830 BST.