Performance Transportation Services, Inc. Files Chapter 11 to Align Capital Structure with Current Industry Environment

Receives Commitment For Up To $10 Million In Debtor-In-Possession Financing

DETROIT, Jan. 25 -- Performance Transportation Services, Inc., ("PTS") the second largest transporter of new automobiles, sport-utility vehicles and light trucks in North America, announced that it and certain of its subsidiaries have filed voluntary petitions under chapter 11 of the U.S. Bankruptcy Code in order to re-align its capital structure, resolve its operational issues in order to allow it to continue to grow and thrive in today's auto industry. In conjunction with the filing, PTS has received a commitment from a group of lenders led by Credit Suisse, Cayman Island Branch for up to $10 million in debtor-in-possession (DIP) financing. Upon Bankruptcy Court approval, the DIP financing will help provide funding for PTS's ongoing operations. PTS expects to utilize the chapter 11 process to reduce its debt and streamline its operations. PTS emphasized that the restructuring process is not expected to impact its ability to fulfill its obligations to its customers. PTS's non-U.S. subsidiaries were not a part of the filing and will continue their business operations outside of the chapter 11 cases.

PTS, which operates under three key transportation business lines including: E. and L. Transport, Hadley Auto Transport and Leaseway Motorcar Transport employs over 2,000 employees who deliver approximately 3.8 million new cars and light trucks annually. The Company expects to deliver cars and trucks without interruption during the reorganization process.

"PTS is integrated into the automotive industry and therefore we are subject to the cyclical trends of our large car manufacturing customers. We have worked diligently to keep pace with the changes in our industry, but decided that chapter 11 offered the Company the best chance of effecting the kind of changes needed to succeed in today's industry environment," said Jeffrey L. Cornish, PTS President and Chief Executive Officer. "This action enables us to continue operating our business without interruption while implementing a debt restructuring in a Court-supervised and controlled environment."

PTS's decision to seek chapter 11 protection was precipitated by significant cost increases coupled with declining revenues that have placed tremendous financial stress on PTS. The current auto industry environment has shown a significant decrease in car manufacturing production in North America over the past few years, in addition to significant downward pricing pressure on all automotive-related suppliers. Declining revenue has been exacerbated by an increase in diesel fuel costs, an escalating cost structure under the current Master Agreement with the Teamsters and the increase in collateral required to secure workers' compensation claims.

"We do not anticipate that our customers and suppliers will experience a change in the way we do business with them," Cornish said. "We have taken steps to make sure that vendors get paid in the ordinary course of business for goods and services provided after the bankruptcy filing, and that our customers continue to receive all deliveries on time with the same high quality service to which they are accustomed. Our new DIP financing, combined with the cash from operations, is expected to provide sufficient funding for operations during the chapter 11 process."

Ongoing employee compensation and benefit programs are being presented to the Court for approval as part of the Company's "first day" motions. The Company anticipates that the Court will approve these requests, thereby ensuring that employees will continue to receive their compensation and benefits in the ordinary course of business.

Cornish concluded, "I would like to thank our customers, vendors and business partners for their continued support during this process. We also appreciate the ongoing loyalty and support of our employees. Their dedication and hard work are critical to our success and to the future of the Company. Our management team is committed to making this financial restructuring successful and leading PTS toward a bright future."

The Company's Chapter 11 petitions were filed in the United States Bankruptcy Court for the Western District of New York, Buffalo. Details regarding the filing can be found at http://www.pts-inc.biz/ and at http://www.bmcgroup.com/pts.