March 27, 2006 - Meruelo Maddux Properties, Los Angeles CA

Meruelo Maddux Properties files Chapter 11 bankruptcy protection

Meruelo Maddux Properties (Nasdaq: MMPI), a self-managed, full-service real estate company that develops, redevelops and owns commercial and multi-family residential properties, today announced that it and numerous of its subsidiaries have filed, or will be filing, voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in California, with the intent of implementing a comprehensive reorganization to restructure its debt. Excluded from the filing is the Company's 35-story 717 W. Ninth Street residential tower project currently under construction.

Earlier this month the Company announced during its fourth quarter earnings call that it was experiencing significant, recurring cash shortfalls because of a challenging credit climate and real estate market and, as a result, was considering its strategic options, including seeking Chapter 11 protection.

"The company worked with diligence to avoid a reorganization filing," said Richard Meruelo, Chairman and Chief Executive Officer of Meruelo Maddux Properties. "Despite our best efforts and careful consideration of all other alternatives, the filing became necessary given the challenging economic climate. Now, our goal is to implement a comprehensive reorganization and continue to seek additional outside financing which we believe will allow us to move forward."

The Company expects to continue to manage its real estate portfolio and does not currently anticipate any disruption to its tenants. As aforementioned, the filing excludes its 35-story residential tower project currently under construction in downtown Los Angeles, and no disruptions to the ongoing construction are anticipated. For further information on the reorganization filing, please call our company hotline at 310.237.5910 or refer to our FAQ sheet on the Company's website.

Source - Company Website PR Release

Company - PDF - FAQ - Chapter 11