Manchester, Inc. Announces Litigation Against Palm Beach Links Multi-Strategy Fund,...

Manchester, Inc. Announces Litigation Against Palm Beach Links Multi-Strategy
Fund, L.P.

DALLAS, Feb. 1 /PRNewswire-FirstCall/ -- Manchester, Inc.
(OTC Bulletin Board: MNCS)today announced that it has filed suit against its
principal lender, Palm Beach Multi-Strategy Fund, L.P. (the Fund).
Manchester's complaint alleges that the suit arose from a series of actions
the Fund, and its principals took over the last few weeks in an effort to
implement a scheme to take possession of all the assets of Manchester and its
subsidiaries (collectively Manchester) to the detriment of all Manchester's
shareholders, other creditors and employees. As part of the scheme, the
complaint alleges the Fund and its principals fraudulently induced a
consultant to Manchester to provide a temporary guaranty secured by real
estate collateral to assist the Fund in getting through its year end audit.
Once the Fund had the guaranty and collateral they immediately refused to
carry out the agreements on which the temporary guaranty and collateral were
provided. Manchester demanded that the Fund and its principals comply with
their obligations under this and other applicable agreements, and, when the
Fund refused to comply, declared the Fund in default. In response, the Fund
made a demand based on a non-existent default and on the basis of such demand
and default has purported to accelerate all the outstanding loans. To protect
its interest and that of its shareholders, creditors and employees, Manchester
filed suit against the Fund, its affiliated entities and its five individual
principals in the 101st Judicial District Court in Dallas, County, Texas. In
its suit, Manchester alleged, among other things, that (1) the Fund has
engaged in fraudulent conduct as part of its scheme to unlawfully take control
of Manchester's assets, and (2) that the Fund and its principals and certain
employees have tortiously interfered with Manchester's contractual and other
relations with its employees by unlawfully trying to intimidate them into
leaving Manchester's employ. Manchester is seeking a variety of relief
including injunction and compensatory and punitive damages. In response, the
Fund, based on the aforementioned alleged default, has purported to schedule a
sale of all the assets of Manchester and its subsidiaries for
February 8, 2008.
Rick D. Gaines, Manchester's Executive Vice President of Corporate
Development whose responsibilities include all legal matters related to the
Company stated that the Company is taking all steps it considers necessary or
appropriate to protect the interest of Manchester's shareholders, creditors
and employees and will vigorously pursue its fraud, tortious interference and
other claims against the Fund and the other parties to the lawsuit. He also
announced the resignations of Rick L. Stanley, Manchester's CEO and Tony
Hamlin, Manchester's Chief Accounting Officer. The Fund's continued unlawful
efforts to dissuade Manchester employees, including Rick L. Stanley and Tony
Hamlin, and consultants from working with Manchester is also part of the
lawsuit filed against the Fund and its affiliates.
As a result of the Fund's inability or unwillingness to finance any of
Manchester's previously announced acquisitions, Manchester is unable to
consummate its announced acquisitions and other potential acquisitions it was
in the process of negotiating. To protect its shareholders, and employees,
Manchester has entered into negotiations with another public company (the
Public Company) to assume Manchester's rights in the acquisitions and acquire
the companies among other things. These negotiations relate to announced
acquisitions in the form of letters of intent and definitive agreements as
well as potential acquisitions that Manchester was in the process of
negotiating. Among the consideration being sought by Manchester is having the
Public Company assume liabilities Manchester incurred in connection with the
acquisition, particularly professional fees. In addition, Manchester is
attempting to negotiate for the Public Company to agree to tender its common
stock for existing common stock of Manchester, thereby providing an
opportunity for Manchester shareholders to exchange their shares for shares in
the Public Company. Payment of any consideration is expected to be contingent
on the Public Company closing at least two such acquisitions. If these
negotiations are successfully concluded, Manchester shareholders would have an
opportunity to participate in the acquisitions Manchester had developed. As
part of any such transaction, there would be potential cost sharing that could
result in lowering Manchester's overhead expense. Although these negotiations
are ongoing, there is no assurance that the negotiations will be successful or
will lead to an agreement of any kind.
In addition to the negotiations discussed above, the Board of Directors
and Management are exploring other alternatives designed to reduce
Manchester's operating expenses while giving it the ability to continue to
grow and expand its business.
In light of the termination of funding at this time by Palm Beach,
Manchester will not have its year end audit completed in time to make a timely
filing of its 10K due later this month. Manchester's Board and Management are
working to rectify this deficiency.
Manchester also announced the relocation of its headquarters to 3131
McKinny Avenue, Suite 360, Dallas, TX 75204. The Company's new headquarters
telephone numbers are 214-347-4263 and 214-468-8965 facsimile. Larry Taylor,
Manchester's CFO stated that the new headquarters provided Manchester with
room to add additional staff while reducing its lease payments.
About Manchester Inc.
Manchester, headquartered in Dallas, Texas, is in the Buy-Here/Pay-Here
auto business. Buy-Here/Pay-Here dealerships sell and finance used cars to
individuals with limited credit histories or past credit problems, generally
financing sales contacts ranging from 24-48 months.
On October 4, 2006, Manchester acquired Nice Cars, Inc. and Nice Cars
Capital Acceptance Corporation. Nice Cars, Inc., headquartered in Ft.
Olgethorpe, Georgia, operates six automotive sales lots that focus exclusively
on the Buy-Here/Pay-Here segment of the used car market.
On December 29, 2006 Manchester acquired F.S. English, Inc. (now operating
as Freedom Auto Sales) and GNAC, Inc. (now operating as Freedom Auto
Acceptance), headquartered in Indianapolis, Indiana. Freedom Auto Sales
operates three automotive sales lots that focus exclusively on the
Buy-Here/Pay-Here segment of the used car market. On July 25, 2007,
Manchester acquired substantially all of the assets of Royce Motors, Inc.,
which now operates as a unit of Freedom Auto Sales.
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. Manchester 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.
SOURCE Manchester, Inc.

Chantelle Hardy, Communications Director of Manchester, Inc., +1-214-402-6903,
cjhardy@manchesterinc.net