NAPERVILLE, Ill., March 23 /PRNewswire/ -- Factory Card Outlet Corp.
(Nasdaq: FCPY) announced today it and its subsidiary have filed voluntary
petitions for protection under Chapter 11 of the Federal Bankruptcy Code in
the U.S. Bankruptcy Court for the District of Delaware.
    Stewart M. Kasen, the Company's Chairman, President and Chief Executive
Officer, said, "As we previously disclosed, we had entered into a letter of
intent with Catalyst Equity Partners concerning a potential preferred stock
investment.  This investment would have allowed the Company to restructure out
of court and pursue its business strategy.  Unfortunately, the discussions
with Catalyst have terminated and we now realize that an out of court
restructuring will not be able to be completed in a timely fashion."
    The Company also announced that it has received a commitment from a group
of lenders led by Foothill Capital Corporation for up to $50 million in Debtor
in Possession financing to provide the Company with adequate working capital
to continue its daily operation.
    Mr. Kasen continued, "Today's action will give us the opportunity to begin
our rehabilitation process and return to our historical position as a market
leader in the value segment of the social expression and gift category.  With
the continued commitment from our employees and support of our vendors, we
intend to continue to provide quality service, broad assortments and value to
our customers and to become a stronger, more vibrant company".
    Certain statements in this news release may constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995.  Such forward-looking statements involve known and unknown risks,
uncertainties, and other factors many of which are described in the Company's
Transition Report on Form 10-K and other filings with the Securities and
Exchange Commission which may cause the actual results or achievements
expressed or implied thereby to be materially different from such forward-
looking statements.

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