SOURCE: Phoenix Associates Land Syndicate

March 01, 2007 10:33 ET

Phoenix Associates Updates on Legal Activities Relating to Murphy Sand & Gravel

MADISONVILLE, LA -- (MARKET WIRE) -- March 1, 2007 -- Phoenix Associates Land Syndicate (Phoenix) (PINKSHEETS: PBLS) today released the following update on two pending litigation activities relating to its Murphy Sand & Gravel (MS&G) mining operations. The following information is provided by Thomas E. Schafer, III, Esq., the Company's lead attorney on these matters.

This information is being made available to the Phoenix shareholders so as to provide them with a more complete understanding of the progress of its legal activities relating to its sand and gravel operations at Murphy Sand & Gravel, Pearl River, LA.

Phoenix Associates Land Syndicate
v. E.H. Mitchell & Co., L.L.C. and
No. 203-12894, 22nd JDC
For the Parish of St. Tammany
Mr. Schafer's comments on this first legal matter are as follows: "In June 2003, Phoenix filed a petition to stop its lessor, E.H. Mitchell and Co., L.L.C. and its manager, Steven M. Furr, from interfering with its peaceful operation of the sand and gravel lease and to assess damages against the lessor for its past acts of interference which impeded Phoenix from developing an increase of income from its operation of the sand and gravel lease.

"Mitchell reconvened in that same suit, alleging that Phoenix had, among other things, entered into two (2) Operating Agreements, which were tantamount to prohibited sub-leases under the original lease. For several years, counsel for Phoenix and counsel for Mitchell were attempting to negotiate a mutual settlement in lieu of going trial. Counsel for Mitchell died an untimely death and substituted counsel for Mitchell returned to Court in an attempt to evict Phoenix from the leased premises.

"Mitchell filed a motion for summary judgment (that is, without a trial) based on the allegations that the two (2) Operating Agreements were actually sub-leases, and as such, violated the terms of the lease. The trial judge granted the motion for summary judgment on September 15, 2006, which declared the Operating Agreements to be sub-leases and as such, the lease was thereby terminated.

"Based on the opinion of its attorney that the granting of the summary judgment was not warranted under the law which controls summary judgments, Phoenix filed a suspensive appeal to the First Circuit Court of Appeals and posted a suspensive appeal bond in the amount of $100,000.00 cash. The suspensive appeal suspended the enforcement of the summary judgment which terminated the lease, thereby allowing Phoenix to continue to develop and operate the sand and gravel business on the leased premises, pending the outcome of the appeal.

"Since the perfection of the appeal, Mitchell had attempted to increase the bond to $1.9 million dollars, which was first rejected by the trial court and subsequently rejected by the Court of Appeal. Mitchell attempted to evict Phoenix, which was dismissed by the trial court. Mitchell attempted to amend its reconventional demand that Phoenix has committed further violations of the lease, which amendment was denied by the trial court. Mitchell attempted to require Phoenix to furnish further information on its operations under the lease, which was denied by the trial court.

"Also, since the perfection of the appeal, Phoenix has filed a new suit against Mitchell, Furr and Reginald Laurent, their attorney, for damages sustained by Phoenix as a result of Mitchell, Furr and Laurent attempting to illegally evict Phoenix from the premises after the suspensive appeal had been perfected and also, for filing a temporary restraining order without following the requisites of Louisiana Law. The temporary restraining order was first granted by the trial court and subsequently dismissed by the court after counsel for Phoenix brought to the attention of the court the failure of counsel for Mitchell and Furr to adhere to the Louisiana Law in requesting a temporary restraining order.

"It is the opinion of counsel that a decision will not be rendered by the Court of Appeal on the appeal of the granting of the motion for summary judgment for approximately one year, at which time either party to the appeal could then apply for supervisory writs to the Supreme Court, which would take about six months longer. Only at that time could Phoenix continue with its suit against Mitchell, Furr and Laurent for interfering with its peaceful operation of the sand and gravel lease. In the meantime, Phoenix will continue to pursue a settlement with Mitchell which would maintain Phoenix in peaceful possession of the sand and gravel lease for an extended period of time."

First National Bank of Picayune v. Pearl River Fabricators, Inc.
No 2004-10184, 22nd JDC for the Parish of St. Tammany
Mr. Schafer's comments on this second legal matter are as follows: "Phoenix purchased a dredge, still under construction, and shaker plant from Growth Fund Industries on December 11, 2001, which dredge and shaker plant had been purchased by GFI from Pearl River Fabricators, Inc, located in Picayune, Mississippi, on November 23, 2001. Unknown to both GFI and Phoenix, Pearl River Fabricators had borrowed $200,000 from FNB of Picayune on December 11, 2000 and gave a security interest in the dredge and shaker plant to secure the loan and recorded the security interest in Mississippi on July 24, 2001.

"In the spring, 2002, Pearl River Fabricators completely delivered the dredge to Phoenix at its mine site in St. Tammany Parish, Louisiana. On November 17, 2003, nineteen (19) months after the dredge and shaker plant had been moved by Pearl River Fabricators to Louisiana, from its construction yard in Picayune, Mississippi, (the same city in which First National Bank of Picayune was located) the bank recorded the security interest in Louisiana, and two months later, First National Bank of Picayune filed a suit in Louisiana and seized the dredge and shaker plant.

"Phoenix filed a petition in that suit for a release of the seizure on the dredge and shaker plant on the legal grounds that Louisiana Revised Statues 10:9-316 requires the lender to perfect its security interest in the new jurisdiction where the dredge and shaker plant were located (in this case, Louisiana) within one (1) year after the dredge and the shaker plant were moved from Mississippi to Louisiana. The trial on this issue was held on May 3, 2004, whereupon the trial judge declared that the Mississippi security interest was still valid and allowed the seizure and sale of the dredge and shaker plant to proceed.

"A devolutive appeal was filed on behalf of Phoenix with the First Circuit Court of Appeals for the State of Louisiana. On May 31, 2006, a five (5) judge panel of the First Circuit Court of Appeals, after hearing arguments advanced by counsel for Phoenix, reversed the trial court judgment and declared that the seizure of the dredge and shaker plant was illegal since the bank had not filed its security interest in the State of Louisiana within one year after the dredge and shaker plant had been moved by Pearl River Fabricators to the State of Louisiana.

"Upon application by the First National Bank of Picayune, the Supreme Court of Louisiana granted supervisory writs to review the aforesaid decision of the First Circuit Court of Appeals. The matter will be argued before the Supreme Court on April 10, 2007."

About Phoenix Associates Land Syndicate (PBLS)

Phoenix Associates Land Syndicate (PBLS) is a public holding company, with thousands of stockholders, that has purchased motivated companies in order to enhance its assets and income basis. Since 1978, PBLS has developed assets and/or interests in 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, visit www.pbls.biz

Forward-Looking Statements

This press release contains statements that are "forward looking" and are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 and federal securities laws. Generally, the words "expect," "intend," "estimate," "will" and similar expressions identify forward-looking statements. By their very nature, forward-looking statements are subject to known and unknown risks and uncertainties that may cause our actual results, performance or achievements, or that of our industry, to differ materially from those expressed or implied in any of our forward-looking statements. Statements in this press release regarding the Company's business or proposed business, which are not historical facts, are "forward-looking" statements that involve risks and uncertainties, such as estimates and statements that describe the Company's future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements. Investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are made.

Contact Information