News Story
UPDATE: Class-action suit launched against Allen-Vanguard
By Ottawa Business Journal Staff
Tue, Oct 13, 2009 11:00 AM EST
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ottawabusinessjournal.com
David Luxton, president and CEO of Allen-Vanguard. (Darren Brown, OBJ)
Siskinds LLP has filed an $80-million class-action lawsuit against Ottawa's Allen-Vanguard Corp.
The London, Ont.-based law firm said in a release that the class action, which also names certain of its current and former officers and directors, seeks damages relating to "certain representations made by the defendants in regard to Allen-Vanguard's acquisition of Med-Eng Systems Inc."
When contacted, Siskinds representatives said that nine former and current officers and directors have been named in the suit including current president and CEO David Luxton and chief financial officer Peter Allen.
The firm went on to say that the suit has been brought on behalf of all entities who acquired Allen-Vanguard securities from Aug. 3, 2007 to Sept. 12, 2009.
Allen-Vanguard had earlier reached a privatization deal with a Philadelphia private-equity firm, but shareholders complained that they had not been consulted or allowed to vote on the deal.
When reached by telephone by OBJ, Dimitri Lascaris, a partner in Siskind's class-action department, said the firm had received "numerous" complaints about Allen-Vanguard over the past several months. After investigating the matter, Mr. Lascaris said the firm decided a suit was warranted.
"We began to receive a steady stream of calls from irate shareholders," he explained. "And though it's not unusual for us to receive complaints, since we do a lot of work in this area, it is unusual for us to receive this many complaints before we even begin litigation."
Mr. Lascaris added the shareholders who had contacted his firm were from all over the country, and included "some quite significant shareholders in the company.
"And people were very exercised about the fact that this company entered into a transaction to buy Med-Eng, that by any measure was a disastrous transaction, and as the company was floundering into the aftermath of that transaction it entered into another transaction, where an entity would acquire the assets with no consideration given to the shareholders of this company."
The firm is asking those who purchased Allen-Vanguard securities to visit its website and complete an online information form.
When contacted by OBJ, Allen-Vanguard declined comment.
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