Crown Group Subsidiary Reaches Agreement With Finova; Crown Released From Guaranty

    IRVING, Texas--Nov. 9, 2001--Crown Group, Inc. ("Crown" or the "Company") today announced that its 70%-owned subsidiary, Smart Choice Automotive Group, Inc. (OTCBB:SCHA) ("Smart Choice"), has entered into an agreement with its primary lender, Finova Capital Corporation ("Finova"), a subsidiary of Finova Group, Inc. , that is expected to resolve Smart Choice's loan covenant violations.
    Separately, Crown has entered into an Agreement which releases the Company from its $5 million guaranty.

    Smart Choice Agreement with Finova

    Certain Florida-based subsidiaries of Smart Choice (the "Florida Finance Group") sell and finance used cars and trucks in Florida. Smart Choice's wholly owned subsidiary, Paaco Automotive Group, L.P. ("Paaco"), sells and finances used cars and trucks in Texas. The Florida Finance Group and Paaco have separate revolving credit facilities with Finova. As reported earlier, the Florida Finance Group has been over-advanced on its revolving credit facility since December 2000, which constitutes an event of default under the facility, and as of September 30, 2001, was over-advanced by approximately $25 million.
    Pursuant to the agreement, the collateral for the Florida Finance Group credit facility with Finova, which consists principally of receivables and inventory of the Florida Finance Group, will be sold at a public foreclosure sale conducted by Finova on November 9, 2001. Smart Choice expects the proceeds from such foreclosure sale will not be sufficient to satisfy the $88 million debt owed to Finova by the Florida Finance Group, thereby creating a substantial deficiency (the "Deficiency"). Further, as part of the agreement, Smart Choice has granted Finova (i) an option to purchase Paaco (the "Paaco Option") for an amount equal to the Deficiency, subject to Smart Choice shareholder approval and an appraisal indicating the value of Paaco is not greater than the Deficiency, and (ii) an option to purchase up to 100% of Smart Choice's remaining 39 million shares of authorized but unissued common stock (the "Smart Choice Stock Option") at a price of $0.30 per share. The Smart Choice Stock Option will terminate upon the closing of any exercise of the Paaco Option. Presently, Smart Choice has approximately 9.8 million shares of common stock outstanding, of which Crown owns approximately 6.9 million shares. The Paaco Option and Smart Choice Stock Option generally expire on or about March 9, 2002.
    As a result of the Finova agreement and the lack of other available capital, Smart Choice will immediately begin to wind down its Florida-based operations. If Paaco is sold to Finova pursuant to the exercise of the Paaco Option, Smart Choice's remaining assets would consist of certain improved and unimproved real estate in Titusville, Florida, including a 35,000 square-foot office facility, as well as various other current and fixed assets. If Finova purchases all of Smart Choice's remaining authorized but unissued common stock pursuant to the Smart Choice Stock Option, Finova would become Smart Choice's majority shareholder, and thus would control Smart Choice.

    Crown Agreement with Finova

    Separately, Crown has entered into a settlement agreement with Finova that provides for Crown to (i) pay Finova $1 million, and (ii) grant Finova an option to purchase Crown's 6.9 million shares of Smart Choice for $1.00, in exchange for Finova unconditionally releasing Crown from its $5 million guaranty of the Florida Finance Group's and Paaco's obligations to Finova. As a result of these transactions and operating losses at Smart Choice, Crown's equity investment in Smart Choice, which totaled $16.4 million at July 31, 2001, will be written off as of October 31, 2001. Crown anticipates that it will receive a federal income tax benefit of approximately $6 million following the ultimate disposition of its investment in Smart Choice.
    "While we are certainly disappointed that our investment in Smart Choice proved unsuccessful, we are confident that entering into the settlement agreement with Finova, which eliminates the Company's $5 million guaranty of the Florida Finance Group's and Paaco's obligations to Finova, is in the best interests of our shareholders," stated Edward R. McMurphy, President and Chief Executive Officer of Crown Group, Inc. "Following the sale of our interest in Smart Choice, the Company's balance sheet and operating results should be more attractive to investors, as the excessive leverage and operating losses of Smart Choice will be eliminated. Going forward, the Company will be able to focus upon our highly profitable America's Car-Mart used car sales and finance subsidiary, which has expanded during the past 20 years from a single location in Arkansas to 52 dealerships in seven states."
    Crown Group, Inc. sells and finances used cars and trucks through its automotive subsidiaries. In addition to its automotive subsidiaries, the Company currently owns 80% of Concorde Acceptance Corporation, a prime and sub-prime mortgage lender; 50% of Precision IBC, Inc., a firm specializing in the sale and rental of intermediate bulk containers; and certain other assets and equity investments. Crown Group is headquartered in Irving, Texas, and its common stock is traded on the Nasdaq National Market under the symbol "CNGR."

    This press release includes statements that may constitute "forward-looking" statements, usually containing the words "believe," "estimate," "project," "expect," or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those relating to the development of the Company's businesses, availability of lines of credit for the Company's businesses, changes in interest rates, the Company's ability to effectively underwrite and collect its loans, changes in estimates and assumptions in determining the adequacy of the Company's allowance for credit losses, competition, adverse economic conditions, dependence on existing management, and other risks which are discussed in the Company's periodic filings with the Securities and Exchange Commission. All forward-looking statements in this release are based upon information available as of the date of this release. Such information may change or become invalid after the date of this release, and by making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release.