Allen-Vanguard Obtains Approval for Reorganization

OTTAWA, Dec. 16 /CNW Telbec/ - Allen-Vanguard Corporation ("Allen-Vanguard" or the "Company") of Ottawa, Canada today announced that it has received approval from the Ontario Superior Court of Justice for the Company's Plan of Arrangement and Reorganization (the "Plan") filed December 9, 2009, under the Companies' Creditors Arrangement Act (the "CCAA"). On December 9, 2009, the Plan had been approved unanimously by the affected creditors under the Plan, being the Company's senior lenders (the "lenders").

Approval of the Plan followed a hearing in which the Court determined that the Plan was fair and reasonable. The Order issued today instructs the Company, Contego AV Investments LLC (the "plan sponsor"), an affiliate of Versa Capital Management, Inc., and the lenders to take immediate steps to implement the Plan, which will result in a complete recapitalization of the Company, expected to be final on December 18, 2009 subject to satisfaction of certain closing conditions. The Company will continue as a private enterprise.

"With our Plan now approved by the Court, we can move forward to complete the recapitalization transaction," stated David E. Luxton, the President and Chief Executive Officer of Allen-Vanguard. "We will be able to meet our schedule of completion by year-end and return our attention to serving our many customers worldwide. I wish to thank all of the employees and advisors who helped us reach this point after more than 18 months of intensive reviews and negotiations. I also wish to thank our lenders who stood by us and allowed us the time to find the right investors."

Under the Plan, the plan sponsor will provide approximately US$70 million of additional capital to the Company. That capital will fund a comprehensive restructuring of the indebtedness owed to the lenders. The lenders will also provide the Company with a new US$30 million revolver facility and a new US$10 million letter of credit facility to finance the Company going-forward. No consideration is available under the Plan for holders of the Company's securities and all existing securities of the Company (including all warrants held by the lenders) will be cancelled or transferred to the plan sponsor upon the implementation of the Plan, and the plan sponsor will become the new owner of the Company.

The Company's obligations to its customers, employees, retirees and vendors, regardless of location, are unaffected by the Plan. The Company will continue all of its regular business operations and payments for goods and services incurred both before and after the December 9, 2009 filing date, and the date of the implementation of the Plan. All existing contracts continue.

The Sanction Order releases the Company from any "equity claims" as defined under the CCAA, which includes, among other things, claims by current or former shareholders arising from their ownership of the purchase or ownership of their shares, including the action commenced against the Company by certain shareholders in October 2009.

    
    About Allen-Vanguard
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Allen-Vanguard Corporation supports the mission of military and homeland security forces around the world with leading proprietary solutions for protection and counter-measures against hazardous devices of all kinds, whether chemical, biological, radiological or explosive (CBRNE), including improvised explosive devices (IEDs) and remotely controlled IEDs ("RCIED"s). Allen-Vanguard equipment is in service in more than 120 countries. Products include Electronic Counter-Measures (ECM) equipment for jamming remote detonation of terrorist devices, specialty security equipment for Explosive Ordnance Disposal (EOD), remote intervention robots for hazardous applications, and personal protective wear for use in dealing with explosive and bio-chemical agents. Allen-Vanguard is the developer and/or sole, worldwide licensee of proprietary technologies such as the Med-Eng bomb suit, the Defender(TM) and Vanguard(TM) Mk2 bomb disposal robots, and the Universal Containment System and CASCAD Foam system for blast mitigation and decontamination of bio-chemical warfare agents. Professional services encompass counter-IED intelligence, training and advisory services, including the Triton(TM) Report on terrorist incidents around the world. The Company operates globally through its wholly-owned subsidiaries under the names "Allen-Vanguard", "Med-Eng" and "Hazard Management Solutions."

Head office operations are located in Ottawa, Ontario, Canada, with manufacturing operations in Pembroke, Ontario; Ogdensburg, New York; and Tewkesbury, U.K. The Company has professional services operations in Shrivenham, UK, Canada and in the U.S. in Arlington, Virginia, plus sales offices in Canada, the U.S., the U.K. and Asia. The Company employs more than 500 people, of which approximately 300 are in Canada. Additional information is available online at www.allenvanguard.com.

    
    Forward looking statements
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This press release may contain forward-looking statements, which reflect Allen-Vanguard's current expectations regarding future events, its strategy, expected performance and condition. Forward-looking statements include statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as "expects," "anticipates," "plans," "believes," "estimates" or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future investments, acquisitions or dispositions, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Company and economic factors. Forward-looking statements are not promises or guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking statements made about the Company. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. We stress that the above-mentioned list of important factors is not exhaustive. We encourage you to consider these and other factors carefully before making any investment decision and we urge you to avoid placing undue reliance on forward-looking statements. Further, you should be aware that the Company disclaims any obligation to publicly update or revise any such forward-looking statements whether as a result of new information, future events or otherwise, prior to the release of the next Management Discussion and Analysis to be released by the Company or except as required by law.

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SOURCE ALLEN-VANGUARD CORPORATION

For further information: For further information: on Allen-Vanguard: David Luxton, Toll Free: 1-800-644-9078, Tel: (613) 739-9646

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ALLEN-VANGUARD CORPORATION

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