Manchester, Inc. and Palm Beach Multi-Strategy Fund, L.P. Announce Proposed Bankruptcy Plan Terms and Litigation Settlement

DALLAS, April 4, 2008 /PRNewswire/ -- Manchester, Inc. (the "Company") and Palm Beach Multi-Strategy Fund, L.P. (the "Fund") jointly announced today that the Company accepted a proposal (the "Proposal") made by Palm Beach Multi-Strategy Fund, L.P. pursuant to which Manchester, Inc. and its subsidiaries (collectively, "Manchester") would reorganize and emerge from chapter 11 bankruptcy. Implementation of the Proposal is contingent on a number of factors, including (1) deposit of $3 million to, in part, satisfy the claims of unsecured creditors and, in part, to fund the expenses of Manchester's bankruptcy estates in connection with the plan approval process, (2) provision of DIP financing of up to $10 million, if necessary, to fund Manchester while it is in bankruptcy, whether or not the plan is ultimately approved, and (3) adoption and approval of a Plan of Reorganization (the "POR"). The Proposal was part of an agreed-to interim cash collateral order submitted to the United States Bankruptcy Court for the Northern District of Texas, Dallas Division, on Wednesday, April 2, 2008. As part of the Proposal, upon the deposit of the $3 million described above, Rick Stanley, former CEO, and Tony Hamlin, former Chief Accounting Officer, will be reinstated as Chief Operations Officer and Chief Accounting Officer, respectively, reporting to the current board of directors of the Company.

As part of the proposed POR, the claims asserted by Manchester against the Fund and its affiliates in cases pending in the United States Bankruptcy Court and in the District Court, 101st Judicial District, Dallas County and the claims asserted by the Fund against the current officers and directors of the Company will be resolved upon approval of the POR. The Proposal also provides that upon approval of the POR, Palm Beach's secured claim against Manchester will be satisfied through the issuance to Palm Beach or its designee of all shares of stock in the reorganized Company.

The full terms of the proposed POR will be incorporated into Manchester's chapter 11 plan, which the parties expect to be filed on or before April 16, 2008. Manchester and Palm Beach have agreed to seek an expedited approval process for the plan, and anticipate that the plan will become effective in early to mid June of this year. In the interim, Manchester will continue to conduct business as usual and Manchester and Palm Beach will work cooperatively to maximize the value of the business and minimize the effects of the bankruptcy on Manchester's employees, customers, and vendors.

In furtherance of its fiduciary duties, Manchester remains obligated to consider any better alternative to the Proposal that may arise.

This press release contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on currently available competitive, financial, and economic data and management's views and assumptions regarding future events. Such forward-looking statements are inherently uncertain. The Company cannot provide assurances that any prospective matters described in the press release will be successfully completed or that the Company will realize the anticipated benefits of any transactions. Actual results may differ materially from those projected as a result of certain risks and uncertainties, including but not limited to: global economic and market conditions; the war on terrorism and the potential from war or other hostilities in other parts of the world; availability of financing and lines of credit; successful integration of acquired or merged businesses; changes in interest rates; management's ability to forecast revenues and control expenses, especially on a quarterly basis; unexpected decline in revenues without a corresponding and timely slowdown in expense growth; the Company's ability to retain key management and employees; intense competition and the Company's ability to meet demand at competitive prices and to continue to introduce new products and new versions of existing products that keep pace with technological developments, satisfy increasingly sophisticated customer requirements and achieve market acceptance; relationships with significant suppliers and customers; as well as other risks and uncertainties, including but not limited to those detailed from time to time in the Manchester's SEC filings. Manchester undertakes no obligation to update information contained in this release. For further information regarding risks and uncertainties associated with the business of Manchester, please refer to the risks and uncertainties detailed in the Manchester's SEC filings.

First Call Analyst:
FCMN Contact:

Source: Manchester, Inc.; Palm Beach Multi-Strategy Fund, L.P.

CONTACT: Richard D. Gaines, President of Manchester, Inc.,
+1-570-857-1028

2008-04-04 18:48:31 0328711 PRNEWSWIRE