Associated Brands Income Fund announced today that it has suspended its January cash distribution due to unexpected poor financial results.

The fund announced the suspension before the opening of trading on the TSX.

The January distribution was due to be paid to unitholders on February 15.

The fund said it earlier disclosed that it breached two financial covenants with its bank due to its weaker-than-expected results for the fourth quarter of 2005.

Due to the breach, Associated Brands’ bank did not give its approval for the January cash distribution to be paid.

The fund said it is working on the situation with its lenders.

“There can be no assurance that any actions taken by the fund’s lenders in response to the breaches will not have a material adverse effect on the fund or its financial condition,” Associated Brands said in a release.

Through its subsidiaries, the fund manufactures and supplies private-label dry food and household products.