Universal Automotive Industries, Inc. Announces Final, Favorable Outcome Of Lawsuit

14 December 2000
Universal Automotive Industries, Inc. Announces Final, Favorable Outcome Of Lawsuit
    ALSIP, Ill., Dec. 14 Universal Automotive Industries, Inc.
announced today the final, favorable outcome of a lawsuit that
has been pending against it since 1995.
    The bankruptcy trustee of First National Parts Exchange, Inc. filed the
lawsuit against Universal in 1995.  In general, the suit alleged that First
National, while experiencing financial difficulty, made certain transfers
(in the form of sale of products at below fair market value) to Universal that
harmed First National's creditors.  The trustee sought damages in excess of
$10,000,000.  The Company recorded a provision of $650,000 in 1997 to reflect
an estimated liability for such contingency.  In 1998, in a victory for
Universal, a bankruptcy court held that only about $499,000 of the transfers
must be repaid, with interest of which the Company paid approximately
$198,000.  As a result, the Company recorded a benefit of $151,000 in 1998.
In July of this year, a district court, ruling on the trustee's appeal of the
bankruptcy court judgment, returned the case to the bankruptcy court for
clarification of certain findings.  On November 7, 2000, the bankruptcy court
clarified these findings and re-affirmed its 1998 judgment.  The trustee did
not appeal the re-affirmation.  His decision not to appeal formally ends the
lawsuit.  The Company believes that the remaining payment to be made under the
1998 judgment will not significantly differ from amounts previously reserved.
    "We are pleased that this long-standing litigation is now officially
behind us," said Universal President and CEO, Arvin Scott.  "We believe that
the courts have vindicated both our actions and integrity."  Mr. Scott noted
that the bankruptcy court specifically rejected the trustee's charge that
Universal failed to act in good faith in connection with certain transactions
challenged by the trustee.
    Universal Automotive Industries, Inc., headquartered in Alsip, Illinois,
specializes in the manufacture and distribution of brake drums, rotors, pads,
shoes and other brake parts under its trademarks "UBP -- Universal Brake
Parts" and "Ultimate Rotors and Friction" in the United States and Canada.
    For further information, contact Jerome J. Hiss, CFO 708-293-4055.
    This news release contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, which are intended to
be covered by safe harbors created hereby.  Such forward-looking statements
involve known and unknown risks, uncertainties (including those risk factors
referenced in the Company's filings with the Securities and Exchange
Commission), and other factors that may cause the actual results, performance
or achievements of the Company to be materially different from any future
results, performance, or achievements of the Company expressed or implied by
such forward-looking statements.