Buffets Holdings, Inc. Files Plan of Reorganization

Positions Company to Emerge from Chapter 11 with Stronger Balance
Sheet
EAGAN, Minn.--(Business Wire)--
Buffets Holdings, Inc. today announced that it has filed its
proposed Plan of Reorganization and related Disclosure Statement with
the U.S. Bankruptcy Court for the District of Delaware. With this
filing, the Company is positioned to emerge from Chapter 11 protection
during the first quarter of calendar 2009.

Buffets Holdings expects to emerge from its reorganization with a
stronger balance sheet, significantly less debt and greater resources
to operate effectively and invest in its business. Over the past
several months, Buffets Holdings has focused its efforts on
right-sizing the organization, including streamlining its portfolio of
restaurants and reducing operating expenses across the business.

Having now filed its Plan of Reorganization, Buffets Holdings will
focus on securing exit financing to replace its Debtor-in-Possession
(DIP) financing when the Company emerges from Chapter 11 and to
provide future working capital. The Plan provides for the Company's
existing lenders to become significant shareholders of the Company
upon emergence.

Mike Andrews, Chief Executive Officer of Buffets Holdings, said,
"The filing of our Plan of Reorganization and Disclosure Statement
marks a substantial achievement in the Chapter 11 process. We believe
that all of the parties involved will agree that the proposed Plan is
a fair and reasonable settlement and compromise of all outstanding
issues and provides the best opportunity for maximum recoveries for
creditors."

He continued, "When we emerge from bankruptcy, Buffets Holdings
will be stronger and more financially secure. We will have
substantially less debt and the right level of resources to operate
effectively and make investments that ensure we can continue to
deliver the highest quality food, service, and value to our guests."

Mr. Andrews concluded, "I want to thank our Team Members for their
hard work and steady support during this process. Because of their
dedication to the Company, we have been able to continue providing
outstanding meals and service to our guests, and are now
well-positioned to succeed in the future. I would also like to express
our appreciation for the continued loyalty of our valued customers,
suppliers and business partners."

Disclosure Statement

The Disclosure Statement filed today includes information about
the proposed Plan of Reorganization, financial estimates regarding the
Company's reorganized business enterprise value, and a description of
the events leading up to and during Buffets Holdings' Chapter 11
cases.

Approval of the Disclosure Statement and related voting
solicitation procedures, which Buffets Holdings will seek at a future
Bankruptcy Court hearing, will permit the Company to solicit
acceptances for the proposed Plan of Reorganization and seek
confirmation of the proposed Plan of Reorganization by the Bankruptcy
Court. Assuming these are achieved, Buffets Holdings expects to emerge
from Chapter 11 reorganization in the first calendar quarter of 2009.

Details of Proposed Plan of Reorganization

The Plan of Reorganization and Disclosure Statement may be
modified prior to the approval of the Disclosure Statement and as a
result of the confirmation process. Key elements of the Plan of
Reorganization, as currently proposed and subject to approval by the
Bankruptcy Court, include:

-- Holders of the Company's pre-petition senior secured loans
will receive, in aggregate, from 93.7% to 96.1% of the newly
issued common stock in the reorganized company upon its
emergence from Chapter 11.

-- Holders of senior notes and deficiency claims related to the
pre-petition senior secured loans will receive, in aggregate,
from 3.3% to 5.3% of the newly issued common stock.

-- Holders of general unsecured claims will receive, in
aggregate, from 0.6% to 1.0% of the newly issued common stock.
The estimated recovery for general unsecured claims is
expected to be between 1.9% and 3.1% of allowed claims.

-- Holders of general unsecured claims of $25,000 or less can
participate in a convenience class in which they will receive
cash equal to 8% of their allowed claims. Holders of general
unsecured claims of greater than $25,000 can elect to reduce
their allowed claim to $25,000 so that they can participate in
the convenience class.

-- The Company's current common stock and warrants will be
extinguished upon its emergence from Chapter 11.

-- It is anticipated that the reorganized company will emerge
from bankruptcy as a privately held enterprise, with an
initial board of directors comprised of five directors, four
of whom will be designated by the Company's pre-petition
lenders. Current CEO Mike Andrews will continue to serve as a
director.

Buffets Holdings, Inc. and all of its subsidiaries filed voluntary
petitions for reorganization under Chapter 11 of the U.S. Bankruptcy
Code on January 22, 2008. More information about Buffets Holdings'
reorganization is available in the Company Information section of the
Company's Web site at www.Buffet.com. Claims information and court
filings, including the proposed Plan of Reorganization and Disclosure
Statement, are available at http://chapter11.epiqsystems.com/buf.

About Buffets Holdings

Buffets Holdings is the parent company of Buffets, Inc., the
nation's largest steak-buffet restaurant company, which currently
operates 558 restaurants in 39 states, comprised of 548 steak-buffet
restaurants and 10 Tahoe Joe's Famous Steakhouse(R) restaurants, and
franchises 16 steak-buffet restaurants in six states. The restaurants
are principally operated under the Old Country Buffet(R), HomeTown
Buffet(R), Ryan's(R) and Fire Mountain(R) brands. Buffets, Inc.
employs approximately 33,000 team members and serves approximately 180
million customers annually. For more information about the Company,
please visit our websites at www.Buffet.com and www.Ryansrg.com.

Safe Harbor Statement

The statements contained in this press release that are not
historical facts are forward-looking statements, including references
to the Company's plans in the context of a bankruptcy reorganization.
These and other forward-looking statements are subject to risks and
uncertainties that could cause actual results to differ materially
from those set forth in, or implied by, the forward looking
statements. Factors that may cause actual results to differ from the
forward-looking statements in general are described in the "Risk
Factors / Forward-Looking Statements" section in Buffets Holdings'
Form 10-K filed with the Securities and Exchange Commission on
September 30, 2008. The statements in this release reflect Buffets
Holdings' current beliefs based upon available information.
Developments subsequent to this release are likely to cause these
statements to become outdated, and no obligation is undertaken to
update the information.

Media:
Kekst and Company
Michael Freitag
Diana Postemsky
212-521-4800

Copyright Business Wire 2008