Railpower's CCAA Restructuring Process Update

BROSSARD, QUEBEC, Jun 01 (MARKET WIRE) --
Railpower Technologies Corp. (TSX: P) and its U.S. subsidiary, Railpower
Hybrid Technologies Corp. (collectively "Railpower"), announced today
that further to the receipt of all required approvals from the Quebec
Superior Court and the United States Bankruptcy Court for the Western
District of Pennsylvania, Railpower has concluded the sale of all of its
assets, except cash on hand and on deposit in financial institutions, the
land and property located in St-Jean-sur-Richelieu (Quebec) and two road
switching locomotives, to R.J. Corman Railroad Group, LLC, a Kentucky
limited liability company.

Railpower has also obtained from the Quebec Superior Court an additional
period of protection under the Companies' Creditors Arrangement Act
(Canada) ("CCAA"). The initial order, which was granted under the CCAA in
favour of Railpower on February 4, 2009 and subsequently extended from
time to time by the court, has now been further extended until August 28,
2009, during which time creditors and other third parties will continue
to be stayed from taking steps against Railpower. The extension of the
stay of proceedings will allow time for Railpower's creditors to file
their claims pursuant to the claims process order and for Railpower to
complete and file a joint plan of arrangement for consideration by its
creditors and the Quebec Superior Court.

About Railpower

Railpower (TSX: P), (www.railpower.com) is engaged in the development,
construction, marketing and sales of high performance, clean locomotives
and power plants for the transportation and related industries. Railpower
has designed and is marketing a range of locomotives for the North
American low and medium horsepower locomotive market. It has also
designed and is marketing hybrid power plants for rubber tyred gantry
cranes (Eco-Cranes(R)). Its technologies have broader potential and
applications in other markets and industries.

Caution regarding forward-looking statements

Certain statements contained in this release contain forward-looking
statements. When used in this document, the words "may", "would",
"could", "will", "intend", "plan", "anticipate", "believe", "estimate",
"expect" and similar expressions may be used to identify forward-looking
statements. Those statements reflect our current views with respect to
future events or conditions, including prospective results of operations,
financial position, and predictions of future actions, plans or
strategies. Certain material factors and assumptions were applied in
drawing our conclusions and making those forward looking statements. By
their nature, those statements reflect management's current views,
beliefs and assumptions and are subject to certain risks and
uncertainties, known and unknown, including, without limitation, the
ability to secure new orders or new financing, our ability to secure the
sale of our securities or assets, our ability to comply with the
covenants and conditions contained in our outstanding convertible
debentures with Ontario Teachers Pension Plan Board, the ability to
retain our employees, product development or manufacturing delays, the
ability of our current manufacturing suppliers to meet our production
demands in terms of quantity, quality and costs, our ability to reach a
satisfactory agreement with another supplier if necessary or, the ability
to restart the construction of our manufacturing facility and if
restarted, to construct our manufacturing facility on time and within the
forecasted budget, changing environmental regulations, the ability to
attract and retain business partners, the acceptance of our existing and
new products, future levels of government funding, the need to obtain and
maintain proprietary rights over our technology, competition from other
technologies or new competitors, the ability to access the capital
required for research, product development, operations and marketing, the
need to generate positive cash flow in the foreseeable future, potential
legal liability related to the recall of our Green Goat(R) locomotives,
changes in energy prices and currency levels.

Further, actual results or events could differ materially from those
contemplated in forward-looking statements as a result of the risks and
uncertainties relating to the CCAA and Chapter 15 proceedings
(collectively, the "Insolvency Proceedings") including: any negative
impacts on the Corporation's business, results of operations, financial
position, cash management arrangements and limitations on the
Corporation's ability to freely deploy its cash resources throughout the
company; relationships with employees, customers, creditors, suppliers
and other stakeholders resulting from the Insolvency Proceedings; the
failure of the Corporation or its U.S. subsidiary (collectively, the
"Applicants") to obtain court approval allowing the sale of assets and/or
subsequent court orders extending the applicable stays of actions and
proceedings against the Applicants to permit them to propose a
restructuring plan to affected creditors; the adequacy of the
Corporation's available cash on hand to fund its ongoing operations or
ability to arrange for sufficient alternative debtor-in-possession
financing during the Insolvency Proceedings; the failure of the
Corporation to obtain the requisite approvals of affected creditors or
the courts for any restructuring plan, or to successfully implement such
a plan or obtain sufficient exit financing, if required, within the time
granted by any court, which could result in substantially all of its debt
obligations becoming immediately due and payable or subject to immediate
acceleration, leading to the likely liquidation of the Applicants'
assets; that the Corporation's existing securities could have no material
value in, and following the approval of, a restructuring plan and could
be cancelled. Many factors could cause our actual results, performance or
achievements to be materially different from any future results,
performance or achievements that may be expressed or implied by these
forward-looking statements. Should one or more of these risks or
uncertainties materialize, or should the assumptions underlying our
projections or forward-looking statements prove incorrect, our actual
results may vary materially from those described in this report as
intended, planned, anticipated, believed, estimated, or expected. Unless
otherwise required by law, we do not intend or do not assume any
obligation to update these forward-looking statements whether as a result
of new information, plans, events or otherwise.

www.railpower.com

Contacts:
Railpower Technologies Corp.
Kamila Wirpszo, Vice-President,
General Counsel and Corporate Secretary
450-678-5277 ext.518
Toll Free: 1-866-678-5277
kwirpszo@railpower.com

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