SOURCE: Phoenix Associates Land Syndicate

January 15, 2008 09:40 ET

Phoenix Associates Wins Decision by Louisiana Supreme Court Not to Rehear Earlier Decision

An Application for Rehearing, Filed by First National Bank of Picayune, Was Denied by the Louisiana Supreme Court on January 7, 2008; Case Relates to Illegal Seizure of Equipment at Murphy Sand & Gravel in 2004

MADISONVILLE, LA--(Marketwire - January 15, 2008) - Phoenix Associates Land Syndicate (Phoenix) (PINKSHEETS: PBLS) announced that the First National Bank of Picayune filed an application for rehearing of the matter between it and Phoenix, which was denied by the Supreme Court on January 7, 2008. This matter relates to its seizure of dredge and shaker equipment in 2004 at the Company's sand and gravel mine in Pearl River, Louisiana.

Tom Schafer, Esq., attorney for Phoenix Associates, states the following:

"In the spring of 2002, a new dredge and shaker plant, which had been purchased by Phoenix, was moved onto the leased premises where Phoenix was conducting its mining operation by the manufacturer of the dredge and shaker plant, namely Pearl River Fabricators, Inc. On January 13, 2004, without any notice or warning, the dredge and shaker plant was seized, along with other Phoenix equipment, by the First National Bank of Picayune, located in Picayune, Mississippi, to satisfy the payment of a loan made by the Bank to Pearl River Fabricators, Inc. Since the dredge and shaker plant seized by the bank was the only operational dredge and shaker plant held by Phoenix, the seizure effectively halted the mining of sand and gravel by Phoenix and greatly diminished its revenue.

Phoenix engaged counsel to stop the seizure of the dredge and shaker plant in the trial court level, on the basis that First National Bank of Picayune had not re-perfected its security interest in the dredge and shaker plant in Louisiana within one year after it was removed from one jurisdiction to another, which in this case was from the State of Mississippi to the State of Louisiana. The trial court rejected the position of Phoenix that the seizure was illegal and the Sheriff proceeded with the judicial sale of the dredge and shaker plant.

Following the sale of the dredge and shaker plant, Phoenix instructed its counsel to proceed with an appeal of the trial court decision to the First Circuit Court of Appeal for the Sate of Louisiana. The case was first argued before the Court of Appeal in September, 2005, before a three judge panel, and subsequently by a five judge panel. The Court of Appeal rendered an opinion in favor of Phoenix which declared that the seizure and sale of the dredge and shaker plant by the First National Bank of Picayune was illegal, thereby reversing the decision of the trial court which allowed the seizure and sale of the dredge and shaker plant. First National Bank of Picayune filed Motion for a Rehearing with the Court of Appeal, which Motion was denied on June 12, 2006.

The First National Bank of Picayune then retained one of the largest law firms in the State of Louisiana to represent it by filing an application for a Writ to the Supreme Court for the State of Louisiana. The Writ was accepted by the Supreme Court, and was followed by briefs being submitted on behalf of both Phoenix and First National Bank of Picayune. Oral argument was presented to the Court in April, 2007. An Opinion was handed down by the Supreme Court on November 16, 2007, which affirmed the decision of the First Circuit Court of Appeal and remanded the case to the trial court for consideration of the damages requested by Phoenix to compensate it for the wrongful seizure and sale of the dredge and shaker plant.

Once again, the First National Bank of Picayune filed an application for Rehearing, which was denied by the Supreme Court on January 7, 2008. The legal position asserted by Phoenix and its counsel in the trial court, namely that the seizure and sale of the dredge and shaker plant was illegal because the First National Bank of Picayune had not re-perfected its security interest in the dredge and shaker plant within one year after the property had been moved to Louisiana, all of which is required under the Uniform Commercial Code, was confirmed by both the First Circuit Court of Appeal for the State of Louisiana and the Louisiana Supreme Court. Phoenix has instructed its counsel to proceed in the trial court for all monetary damages sustained by Phoenix as a result of its being deprived of the use of a new dredge and shaker plant, which would have been the cornerstone of a full and extended development of the sand and gravel pit. Accordingly, Phoenix has retained the services of experts to prepare the actual damages sustained by Phoenix."

Paul Alonzo, President and CEO of Phoenix, stated, "As all of our stock holders know, Phoenix is a holding company that operates a number of other wholly owned subsidiaries. Phoenix counted on the mining income to fund and propel its purchases. The negative impact, caused by the banks illegal actions, had a devastating impact on Phoenix and its subsidiaries. Instead of a tremendous and constant income from its mining operations, Phoenix actually had to start putting enormous amounts of money into legal actions in fighting for its rights."

After years of fighting, Phoenix finally had to begin divesting of assets because of its loss of income combined with the negative flow of money which was too much for Phoenix to sustain. For these reasons and others, yet to be argued in court, the Phoenix administration has calculated its overall company losses to be in excess of $330,000,000. Phoenix has now hired mining experts, forensic accountants, economists and business evaluation experts in an effort to determine the exact and foreseeable losses caused by the bank's actions. Phoenix expects to continue to spend large sums of money while asserting its damages claim against the bank and in its continuing litigation against the landlord in the lease matter, including damages, which is integrally tied to the actions of the bank.

Phoenix will pursue diligently all efforts to settle this matter and to maximize the recovery of the huge losses inflected upon Phoenix and its shareholders by the illegal actions taken by the First National Bank of Picayune.

Phoenix attorneys and management will keep shareholders informed of our progress in the on going collection activities.

About Phoenix Associates

Phoenix Associates Land Syndicate is a holding company with assets in aviation, sand & gravel, soil products, land development, oil and natural gas, commodity brokering, plumbing, trucking, contract hauling, construction, swimming pool construction and construction related industries. For more information go to: www.pbls.biz

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