Hemosol Amended Plan of Compromise and Arrangement is Approved by Creditors

TORONTO, Aug. 8 /CNW/ - PricewaterhouseCoopers Inc. in its capacity as interim receiver (the "Receiver") of the assets, property and undertaking of 1608557 Ontario Inc. (formerly known as Hemosol Corp.) ("1608557") and its affiliate Hemosol LP (collectively, "Hemosol") announces that Hemosol's amended plan of compromise, arrangement and reorganization pursuant to the Companies' Creditors Arrangement Act and the Business Corporations Act (Ontario) (the "Plan") was approved yesterday by the majorities of Hemosol's creditors required by statute. As a result, the Receiver will be bringing a motion to the Ontario Superior Court of Justice (the "Court") on August 13, 2008 for an order, inter alia, sanctioning the Plan. Should the Court grant such an order, the Receiver anticipates working with the plan sponsor, Catalyst Fund Limited Partnership II, with a view to giving effect and implementing the transactions and reorganizations contemplated by the Plan.

The Plan, if implemented, will provide for, amongst other things: (1) the distribution to certain unsecured creditors of Hemosol, on a pro-rata basis, of a pool of cash totalling $130,000, (2) the distribution to certain secured creditors of Hemosol of shares of 1608557 Ontario Inc. and notes entitling such creditors to share in net proceeds of a transaction, if any, to realize on Hemosol's tax losses, (3) the compromise and release of all claims against Hemosol and their respective employees, and former and present officers and directors except specific claims described in the Plan and claims that cannot be released at law, and (4) the dilution of the existing shares of Hemosol as a result of the issuance of new and additional shares such that, if the Plan is implemented, the existing shareholders shall retain no less than 1% of the post-restructuring equity of the Company.

It is not known at this time whether the Court will sanction the Plan and, if so, whether the Plan will be implemented. However, if the Plan is implemented, it is anticipated that it will result in a substantial dilution of the pre-restructuring shares of 1608557.

Information in respect of the receivership, including the Plan, is available at www.pwc.com/brs-hemosol

Certain statements concerning 1608557's future prospects are "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and other applicable securities legislation. There can be no assurances that future results will be achieved, and actual results could differ materially from forecasts and estimates. Important factors that could cause actual results to differ materially from forecasts and estimates include, but are not limited to: 1608557's continued viability as a going concern; the risk that 1608557 may not become profitable; the Receiver's ability to complete a transaction pursuant to the terms of the Order; and other factors set forth in filings with Canadian securities regulatory authorities and the U.S. Securities and Exchange Commission. These risks and uncertainties, as well as others, are discussed in greater detail in the filings of 1608557 with Canadian securities regulatory authorities and the U.S. Securities and Exchange Commission. 1608557 makes no commitment to revise or update any forward-looking statements in order to reflect events or circumstances after the date any such statement is made.

Contacts

Information in respect of the receivership
including the Plan
is available at www.pwc.com/brs-hemosol