Plaintiffs v Allen-Vanguard Corp.
Allen-Vanguard Faces Class Action
An $80-million class-action lawsuit has been filed against Ottawa-based Allen-Vanguard Corp. and a number of it's current and former officers and directors.
The class action, filed in the Ontario Superior Court of Justice but not yet certified, seeks a "declaration that the defendants misrepresented the true financial condition of Allen-Vanguard Corp. in the period between Aug. 3, 2007, and Sept. 12, 2009."
The class period ends on Sept. 12, the same day Allen-Vanguard announced a transaction with Versa Capital Management, a private-equity firm. "The deal provides no consideration for the shareholders," said Allen-Vanguard when announcing that transaction.
Over the next few weeks a detailed statement of claim will be filed. The suit alleges Allen-Vanguard overpaid by "at least $250-million" to purchase Med-Eng and that "the defendants did not conduct proper due diligence in advance of the transaction and turned a blind eye to the grossly excessive consideration being paid by Allen-Vanguard for Med-Eng. "The suit further alleges that "because Allen-Vanguard has materially overpaid for Med-Eng, it was forced to take writedowns during the class period amounting to in excess of $516.3-million."
Because Allen-Vanguard "failed to take the writedowns in a timely fashion ... the shares of Allen-Vanguard were materially overvalued throughout the class period and the plaintiff [Claude Laneville] and the class members paid an excessive price for the Allen-Vanguard securities that they purchased during the class period," the lawsuit alleges.
For more information please contact:
London-based Siskinds LLP
11 Prince Arthur Avenue
Toronto, Ontario
M5R 1B2
Phone: (416) 362-8334
Fax: (416) 362-2610
