DALLAS, Feb. 28 /PRNewswire-FirstCall/ -- On February 7, 2008, the
Company publicly announced that on February 1, 2008 a purported stockholder
derivative and class action lawsuit styled Andrew T. Berger v. Icahn
Enterprises LP, et al. (Case No. 3522-VCS) was filed in the Delaware Court
of Chancery against the Company, as a nominal defendant, and Icahn
Enterprises L.P. ("Icahn Enterprises"), Robert G. Alexander, Jon F. Weber,
Robert J. Mitchell, Jack G. Wasserman and Robert H. Kite, as additional
defendants (the "Lawsuit"). Messrs. Alexander, Weber, Mitchell, Wasserman
and Kite are current or former directors or officers of the Company. The
Lawsuit alleges, among other things, that certain of the Company's current
and former officers and directors breached their fiduciary duties to the
Company and its shareholders in connection with the Company's previously
announced November 21, 2006 sale to NEG Oil & Gas LLC ("NEG Oil & Gas") of
the Company's former unconsolidated non-controlling 50% limited liability
company interest in NEG Holding LLC ("NEG Holding") as a result of the
exercise by NEG Oil & Gas of its contractual redemption option under the
operating agreement governing NEG Holding.
Since the redemption of the Company's former interest in NEG Holding,
the Company has had no business operations and its principal assets consist
of its cash and short-term investment balances, which currently aggregate
approximately $48.0 million. As a result, on November 12, 2007, the
Company's Board of Directors (the "Board") concluded that the liquidation
and dissolution of the Company and the distribution of the Company's assets
in connection therewith was in the best interests of the Company's
shareholders when compared to other alternatives and, on December 13, 2007,
the Company announced that the Board had scheduled the special meeting of
the shareholders (the "Special Meeting") to consider and vote on the Plan
of Complete Dissolution and Liquidation of National Energy Group, Inc. (OTC
Bulletin Board: NEGI) (the "Plan") in the form attached to the definitive
proxy statement dated January 7, 2008 (the "Proxy Statement") and the
dissolution and liquidation of the Company in accordance therewith (the
"Dissolution"). Company shareholders of record as of the close of business
on December 27, 2007, which is the record date for the Special Meeting
previously established by the Company (the "Record Date"), are entitled to
notice of and to vote at the Special Meeting.
At the time that the Company called the Special Meeting and transmitted
its related Notice of Special Meeting of Shareholders and the Proxy
Statement, both dated January 7, 2008, to its shareholders as of the Record
Date, the Lawsuit had not been filed and accordingly such materials do not
contemplate the existence of the Lawsuit. As a result, the Company convened
the Special Meeting on February 7, 2008 for the sole purpose of adjourning
it to February 28, 2008, to permit the Company to evaluate the Lawsuit.
On February 27, 2008, the Company's Board met to further evaluate the
Lawsuit and its potential impact on the proposed Plan and the Dissolution.
At that meeting, the Board reviewed the Company's obligation, pursuant to
its Restated Certificate of Incorporation and By-laws, to indemnify to the
full extent authorized by law any person named as a defendant in litigation
by reason of the fact that such person is or was an officer or director of
the Company, as well as the terms and conditions of the Company's
outstanding directors and officers insurance policy (the "D&O Policy"). The
Board also reviewed a request from a director of the Company named as a
defendant in the Lawsuit that the Company advance litigation defense costs
and expenses (including attorneys' fees) incurred by him in connection with
the Lawsuit, as permitted under governing Delaware law.
After careful consideration of the foregoing matters, the Board made
the following determinations:
1. To appoint a special board committee to review and evaluate, and
determine whether to approve and authorize, the advancement of expenses to
the requesting director, along with the advancement of costs and expenses
(including attorneys' fees) of other current and former officers and
directors named as defendants to the Lawsuit (collectively, the
"Advancement Obligations"), and if so, on what terms, and to so advise the
Board and the requesting parties of such determinations.
2. The Company should proceed with its proposed Dissolution pursuant to
the Plan, subject to shareholder approval at the Special Meeting, under the
continued supervision of the Company's Board of Directors and officers.
3. In order to permit the Company's shareholders sufficient time to
review the information set forth herein, the Special Meeting, which was
originally convened on February 7, 2008 for the sole purpose of adjourning
it to February 28, 2008, should be reconvened on February 28, 2008 for the
sole purpose of adjourning it to a later date. In accordance with the
Board's determination, the Special Meeting was reconvened on February 28,
2008 for the sole purpose of adjourning it to 10:00 a.m., Central Time, on
Friday, March 14, 2008, in the White Rock Room, Radisson Hotel Central
Dallas, 6060 North Central Expressway, Dallas, Texas 75206.
4. As a result of the Lawsuit and the Company's possible
indemnification obligations with respect thereto (including, if approved by
the special committee referred to above, the Advancement Obligations), the
Company could face financial exposure, which might not be fully covered by
the Company's D&O Policy and which the Board is presently unable to
estimate. Although the Proxy Statement provided the Company's estimate that
substantially all of the Company's liquidation proceeds would be
distributed to the Company's shareholders within six months following the
filing of a certificate of dissolution with the Delaware Secretary of State
and contemplated that the amount ultimately distributed to the Company's
shareholders would be between $4.22 and $4.24 per share of common stock
based on the assumptions outlined in the Proxy Statement, because of the
uncertainties as to the ultimate settlement amount of the Company's
remaining liabilities and expenditures, including the Company's
expenditures during liquidation and any financial exposure related to the
Lawsuit, the Advancement Obligations, if approved, and the Company's
possible related indemnification obligations, the Company will not make any
liquidation distributions to shareholders pursuant to the Plan and the
Dissolution until the Board, at a future meeting thereof and by majority
vote, determines that the Company has paid, or made adequate provision for
the payment of its liabilities and obligations, including any liabilities
relating to the Lawsuit and the Company's related Advancement Obligations,
if approved, and possible indemnification obligations.
5. The Company's Board and officers shall continue to oversee the
Company's liquidation process and the process of winding up the affairs of
the Company as contemplated under Delaware law and pursuant to the Plan.
Accordingly, in deciding whether to vote in favor of the Plan and
Dissolution at the Special Meeting, as adjourned to March 14, 2008, as set
forth above, Company shareholders as of the Record Date should note,
because of the above-noted uncertainties concerning the ultimate settlement
amount of the Company's remaining liabilities, the following:
1. If approved at the Special Meeting, the Company will proceed with
its Dissolution pursuant to the Plan, including the filing of a certificate
of dissolution with the Delaware Secretary of State and the filing of
necessary documentation with the Securities and Exchange Commission to
terminate the Company's status as a reporting company under the Securities
Exchange Act of 1934, as amended, under the continued supervision of its
Board of Directors and officers as previously outlined in its Proxy
Statement;
2. We are not able to predict the date or dates on which liquidation
distributions, if any, will be made to shareholders;
3. Any such distributions could be substantially less than the range
previously estimated in the Company's Proxy Statement; and
4. Following the Company's filing of the certificate of dissolution
with the Delaware Secretary of State and the cessation of the Company's
reporting obligations under the Securities Exchange Act of 1934, as
amended, the Company will provide periodic updates on the status of its
Dissolution process via press release and/or mailing to Company
shareholders of record as of the date on which such certificate of
dissolution is so filed in Delaware, which shareholders will be the parties
entitled to receive liquidation distributions, if any, under the Plan.
Forward-Looking Statements
This press release may contain projections and other forward-looking
statements within the meaning of Section 21E of the Securities Exchange Act
of 1934, as amended. Any such projections or statements reflect the
Company's current views with respect to future events and financial
performance. No assurances can be given, however, that these events will
occur or that such projections will be achieved and actual results could
differ materially from those projected. A discussion of important factors
that could cause actual results to differ materially from those projected
is included in the Company's periodic reports filed with the Securities and
Exchange Commission from time to time.
SOURCE National Energy Group, Inc.
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Related links:
http://www.negx.com
CONTACT:
Bob G. Alexander of National Energy Group,
Inc., +1-214-692-9211, fax, +1-214-692-5055
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