State College, Pennsylvania ―Today, W.S. Lee & Sons, Inc., signed loan closing documents with Omega Bank in accordance with the timeline established in an April 30, 2007, Federal Bankruptcy Court Order confirming the W.S. Lee & Sons, Inc., Plan of Reorganization. This momentous event signals the launch of a financially reorganized and restructured—and re-energized—company named Lee Food Service, Inc., and serves as the capstone to Chapter 11 proceedings for the 135-year old regional food distributor.

Today’s document signing triggered two additional landmarks for the new Altoona-based company. First, two million dollars in capital was infused from investors Donald Devorris, chairman of the board of the Blair Companies, Inc.; Stephen Sheetz, chairman of the board of Sheetz, Inc.; and, three Lee Food Service leadership team members, Robert S. Donaldson, President & CEO; Mark Koschny, Sr. Vice President of Sales, Purchasing & Marketing; and, Hugh Reilly, Sr. Vice President and CFO. Second, there was an immediate disbursement of cash to creditors who were a part of the Chapter 11 proceedings.

“This is a great day—and a fresh start—for every constituent of Lee Food Service,” affirmed Lee President & CEO Robert S. Donaldson. “Our suppliers have been paid, our company has capital to grow, our employees have clear direction to pursue their mission of service leadership, and our customers can have confidence that we now have a more solid foundation than our competitors from which to grow.”

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, all employees worked diligently with customers, suppliers and creditors to restructure debt, reduce expenses, streamline product offerings and enhance customer service. On April 30, 2007, the Court approved the company’s Plan for Reorganization. Fundamental changes to the company’s finances, operations, products and services will enable it to play a more integral role for its customers than in the past.

“We are positioned for strong growth,” asserts Donaldson. “Amidst a climate of uncertainty for other distributors in our industry, our customers can rest assured that the path for Lee Food Service is clear. With a dedicated team of employees, led by one of the most experienced management teams in the industry, and the concomitant support of investors and suppliers, Lee Food Service is eager, and prepared, to profitably grow our company by becoming the service leader we have pledged to be for customers.”

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.