Today, Federal Bankruptcy Court Judge Bernard Markovitz signed a Court Order that confirms the W.S. Lee & Sons, Inc., Plan of Reorganization. The Order, signed only thirteen months after the company filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code, signals the start of a ten-day period wherein company management will finalize details in order to emerge from Chapter 11 as a new company named Lee Food Service, Inc.

“This is fabulous news for our employees, customers, suppliers and investors,” says Lee CEO Robert S. Donaldson. “While confirmation of the Plan was expected, we are gratified to have it in the rearview mirror. We are eager to begin growing our company according to plan and becoming the service leader we have pledged to be for our customers.”

Balloting results on the company’s Plan of Reorganization, presented to the U.S. Bankruptcy Court for the Western District of Pennsylvania on April 6, 2007, showed overwhelming support from unsecured creditors (94%) and other company stakeholders. Support for the Plan was buoyed even further when the singular objection to the Plan was recently withdrawn.

W.S. Lee & Sons, Inc., filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code on March 14, 2006, in an effort to address financial and operational challenges that hampered its performance. Over the last thirteen months, management and employees worked diligently with customers, suppliers and creditors to restructure debt, reduce expenses, streamline product offerings and enhance customer service. The company believes these fundamental changes to finances, operations, products and services will enable it to play a more integral role for its customers than in the past.

”Achieving a turnaround of this magnitude in little more than 13 months would not have been possible without the dedication, trust and hard work of our employees, customers and suppliers,” noted Donaldson. “We charted a course in March 2006 with the purpose of emerging from Chapter 11 quickly and preserving jobs. We asked all stakeholders—employees, customers, and suppliers—to join us in rebuilding our company which involved making difficult but necessary choices. Everyone stayed the course and, in November, we filed a Plan of Reorganization which was overwhelmingly—almost unanimously—supported.”

Plan highlights for Lee Food Service, Inc., include continued financing support from the company’s primary lender, Omega Bank, as well as an insurgence of new capital from local entrepreneurs and community leaders Donald Devorris, chairman of the board of Blair Companies, Inc., and Stephen Sheetz, chairman of the board of Sheetz, Inc. “Steve and I are proud to be a part of the plan to aid in the preservation of this 135-year-old company and the perpetuation of so many jobs in Central Pennsylvania,” says Devorris.

The recently confirmed Plan of Reorganization also calls for immediate payment to unsecured creditors. “In many scenarios, these creditors (in our case, product suppliers) are paid over time, sometimes years,” says Donaldson. “Providing a quick resolution for our suppliers allows us to build a needed foundation to earn their trust and support in serving our customers going forward.”

One of the oldest privately owned foodservice distributors in the nation, Lee Food Service distributes food and related products in the healthcare, education and broad line restaurant customer segments throughout Pennsylvania and contiguous states, utilizing a fleet of multi-temperature tractors and trailers. The company maintains a state-of-the-art distribution center with freezers, coolers and a dry warehouse.