Pioneer Files for Chapter Eleven to Protect Itself from UNOCAL Verdict While Pursuing Action Against Mobil
SALT LAKE CITY, UT - Feb. 21, 1997 - Pioneer Oil and Gas (OTC BULLETIN BOARD: PIOL) announced that because of the UNOCAL
litigation pending in California, Pioneer sought protection under Chapter 11 of the bankruptcy code on February 19, 1997. Pioneer intends to
deal with all creditors claims including those of UNOCAL in the context of a Chapter 11 reorganization. Pioneer believes a plan of
reorganization will be proposed as soon as possible and hopes to emerge from bankruptcy in a reasonable amount of time. Pioneer believes
that the action UNOCAL is asserting against Pioneer is the sole responsibility of Mobil Oil Corporation.
Don J. Colton, President of Pioneer commenting on this lawsuit stated:
It is unfortunate that UNOCAL and Mobil worked out an agreement that UNOCAL would have to bankrupt Pioneer before it could sue
Mobil. The original lawsuit filed in California named both Mobil and Pioneer as defendants. However, UNOCAL pressured by Mobil on
other California projects, for which UNOCAL was required to obtain Mobil's consent, dropped Mobil from the lawsuit. Pioneer attempted
to bring Mobil back into the litigation but our motion was denied by the California court. Pioneer was then forced to sue Mobil separately in
federal court in Salt Lake City. The problem is that our action against Mobil will probably not be heard by the court until 1998. In the
meantime UNOCAL is pursuing its $563,158 verdict obtained at trial and also claiming that Pioneer is liable for additional sump cleanup of
about two million dollars. The sumps which are oil filled reserve pits buried under eight feet of fill were not disclosed to Pioneer by Mobil
when the property was sold to Pioneer for $12,365 in 1987. We believe Mobil Oil Corporation intentionally sold the property to Pioneer to
avoid this liability. An inspection of the property by Pioneer did not disclose the existence of this liability since the sumps had been buried
and farm crops and other vegetation were growing over them. The sumps were created in the 40's and 50's and instead of being remediated
at the time as is current standard industry practice were instead just covered over with fill. Pioneer believes it will prevail against Mobil in
its lawsuit and that Mobil will be responsible for all costs asserted by UNOCAL and in addition Mobil may have to pay Pioneer punitive
damages. Our problem is timing, because of the California court decision, UNOCAL can obtain a judgment against Pioneer before we can
prevail against Mobil.
Pioneer Oil and Gas has 41,403,478 shares outstanding with over 2,000 shareholders and is traded nationally over the counter on the
NASDAQ-BBS with the symbol PIOL.
SOURCE Pioneer Oil and Gas /CONTACT: Don J. Colton of Pioneer Oil and Gas, 801-566-3000/
Pudgie's Chicken, Inc. Announces Approval of Agreement With Secured Creditor
UNIONDALE, N.Y., Feb. 21, 1997 - Pudgie's Chicken, Inc. (Nasdaq: PUDGQ), an operator of quick service takeout and delivery Pudgie's
restaurants, announced today that on February 12, 1997 the Bankruptcy Court overseeing its Chapter 11 case approved an agreement among
Pudgie's, its secured creditor and its Official Creditors and Equity Security Holders Committees that will pave the way for Pudgie's
successful reorganization. Pursuant to the Agreement, the secured creditor agreed to vote in favor of any plan of reorganization that pays the
secured creditor $1 million on account of its $3.6 million secured claim and provides the secured creditor with a proportionate share of any
stock given to unsecured creditors in satisfaction of the balance of its claim. The Agreement also allows Pudgie's to obtain further DIP
financing senior to the secured lender's claim, to use the secured creditor's cash collateral on a final basis and to release all franchise fees
previously held in escrow. In exchange, the Company and the Official Committees agreed to recognize the validity of the secured creditor's
claim and end all litigation relative to that claim.
Steve Wasserman, President and Chief Executive Officer of Pudgie's, said, "This Agreement is an important milestone for Pudgie's
reorganization efforts. It enables the Company to discuss proposals put forth by potential third parties who are interested in making
investments in Pudgie's. Since the agreement was reached, Pudgie's has been soliciting third parties interested in providing interim financing
and long-term equity investments."
Pudgie's Chicken announced on September 18, 1996 that it had filed a voluntary petition for reorganization under Chapter 11 of the
Pudgie's Chicken operates and franchises quick service Pudgie's Famous Chicken restaurants with an emphasis on home delivery that offers
tasty, reasonably priced meals featuring fresh skinless fried chicken. Pudgie's also offers a "spicy" chicken menu, barbecued ribs, shrimp,
corn on the cob, mashed potatoes, rice, salads and other side dishes.
You can contact pudgie's on their web site at: http://ison.com/pudgies/source
SOURCE Pudgie's Chicken, Inc. /CONTACT: Steven Wasserman, President and CEO of Pudgie's Chicken, 516-222-8833; or Joe Calabrese
or Kerry Thalheim of The Financial Relations Board, 212-661-8030/
Search Capital and MS Financial Agree With Lenders Led by Fleet Bank on Acquisition and on Terms for $75 Million Credit Facility
DALLAS, TX - Feb. 21, 1997 - Search Capital Group, Inc. (OTC Bulletin Board: SCGI, SCGIP) announced that it had obtained the
necessary consent from the lenders to MS Financial, Inc. ("MSF") (Nasdaq: MSFI) to continue their banking arrangements with MSF through
the closing of the previously announced acquisition of MSF by Search.
A letter agreement and consent signed February 19, 1997, between Search, MSF and Fleet Bank, N.A., agent bank for the seven member
bank group, provides for amendment of the existing loan agreement between MSF and the banks. The agreement with the lenders also
includes terms for the continuation of the line of credit after the closing of the acquisition. The agreement and consent from the banks was one
of the conditions to the acquisition of MSF by Search. The acquisition, which is projected to take place before May 15, 1997, is still subject
to regulatory approvals, other customary conditions, and completion of final documentation with the banks.
Under the terms of the agreement with the banks, during the interim period until the closing of the acquisition by Search, MSF will be
allowed continued use of a $75 million line of credit for the purchase of new loan contracts. After the completion of the acquisition by
Search, the line of credit will be available for use by the newly merged subsidiary of Search. Search's merged subsidiary will be able to use
the $75 million credit line for up to six months. Thereafter, the credit line will be reduced to $50 million for the next six months and must be
repaid in full within twelve months after the closing of the acquisition.
"This support from the banks should enable MS Financial to continue in full operation through the closing of the acquisition. MS Financial's
ability to maintain branch operations and support the dealer network during the interim period until the acquisition closes is an important
factor in the preservation of the value that Search expects to obtain through this transaction," said George C. Evans, Search's chairman,
president and chief executive officer.
Mr. Evans noted that, although the non-prime auto finance sector is presently in a state of turmoil, Search is positively positioned in the
non-prime auto finance arena with its veteran consumer finance management team, solid balance sheet, and highly effective decentralized
servicing/collection operations. He believes that the willingness of Fleet Bank and the six other banks to continue the MSF credit line is
further evidence of their confidence in the strength of Search's management team and operations.
Search Capital Group, Inc. is a specialized financial services company engaged in the purchasing, financing and servicing of non- prime
automobile installment loans. Search is also initiating non- auto consumer finance operations. Search common shares and its 9%/7%
convertible preferred shares are traded on the Over the Counter Bulletin Board under the symbols "SCGI" and "SCGIP", respectively.
MS Financial (Nasdaq: MSFI) is a specialized consumer finance company that purchases and services retail installment contracts on new
and used cars and light duty trucks. The company serves more than 800 dealerships in 13 states.
SEC Cautionary Safe Harbor Language This press release contains certain forward-looking statements, as defined in the Private Securities
Litigation Reform Act of 1995, with respect to the effects that continuation of MSF's credit line is expected to have on MSF's operations and
that the acquisition of MSF will have on Search's financial position and earnings. These statements are based on current expectations that
involve a number of risks and uncertainties, and actual results may differ materially. Factors that may cause or contribute to such differences
include the ability of MSF to maintain branch operations and support the dealer network, Search's actual growth rate, delinquency and
default rates with respect to the contracts included in its and MSF's portfolios, the extent to which expected operating efficiencies are
realized, changes in business and market conditions and the economy in general, increased competition, changes in governmental and
regulatory matters, unforeseen litigation and other risks factors identified in Search's SEC filings under the caption "Risk Factors."
SOURCE Search Capital Group, Inc. /CONTACT: James F. Leary, Vice Chairman, Finance of Search Capital Group, Inc., 214-965-6000;
or Vann Martin, President and COO of MS Financial, Inc., 601-978-6643/