VANCOUVER, May 30, 2013 /CNW/ - Allon Therapeutics Inc. (TSX: NPC) ("Allon" or the "Company") announced today that it has filed a proposal (the "Proposal") pursuant to the Bankruptcy and Insolvency Act (Canada) (the "BIA") with the Official Receiver, naming Deloitte & Touche Inc. as proposal trustee (the "Trustee").
Allon and Paladin Labs Inc. ("Paladin") have executed a non-binding term sheet outlining Paladin's expression of interest to obtain all of the issued and outstanding shares of Allon through a reorganization of Allon's share structure (the "Transaction"). The key terms of the Transaction are as follows: Redemption of all issued and outstanding shares of Allon for CDN$1.00 in the aggregate; Cash payment by Paladin to Allon in the amount of $900,000; Cancellation of all outstanding employee stock options and other agreements granting rights to subscribe for purchase any shares or other securities in Allon; A reorganization pursuant to the Canada Business Corporations Act whereby Allon's articles will be amended eliminating current classes of shares and creating a new class of common shares which shall, at closing, be issued to Paladin; and obtaining of all necessary court and regulatory approvals prior to the closing date, which must occur no later than August 1, 2013.
"Allon also announces that the Toronto Stock Exchange ("TSX") has determined to halt the trading of the Company's common shares on the TSX, effective immediately, for failure to meet the continued listing requirements of the TSX, including as a result of the BIA proceedings commenced by the Company. It is expected that the common shares will be delisted from the TSX at the close of market on June 28, 2013.
Allon expects that its creditors will derive a greater benefit as a result of the Transaction and the Proposal then would result from a liquidation process under the BIA. Under the Proposal, a fund will be established for the payment of priority and preferred creditor claims under the BIA, payment of all costs associated with the Proposal and the pro rata payment of all proven claims of creditors with the remaining funds. Each unsecured creditor shall, in full and final satisfaction of its claim(s), be paid the first $1,000.00 of its proven claim, and then be paid an amount calculated pursuant to the formula outlined in the Proposal.
A meeting of Allon's creditors is scheduled to take place on June 12, 2013 at 10:00 a.m. at the Trustee's office. In the event the Proposal receives the requisite support at the creditors' meeting, Allon will file an application to the British Columbia Supreme Court to seek court approval of the Proposal and the Reorganization.
Forward Looking Statements
Statements contained herein, other than those which are strictly statements of historical fact may include forward-looking information. Such statements will typically contain words such as "believes", "may", "plans", "will", "estimate", "continue", "anticipates", "intends", "expects", and similar expressions. While forward-looking statements represent management's outlook based on assumptions that management believes are reasonable, forward-looking statements by their nature are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, events or developments to be materially different from any future results, events or developments expressed or implied by them. Such factors include, among others, Paladin's decision to finance the Transaction and obtaining court approval for the Proposal and the Transaction. Readers are cautioned not to place undue reliance on such forward-looking statements.
SOURCE Allon Therapeutics Inc.