U.S. Bankruptcy Court Confirms Irving Tanning's Plan of Reorganization

Full operations will continue in Hartland and all existing jobs are preserved under the approved plan

HARTLAND, Maine (August 13, 2002) - Irving Tanning Company ("Irving Tanning") today announced that the U.S. Bankruptcy Court for the District of Maine has confirmed Irving Tanning's plan of reorganization, allowing the company to reorganize and successfully emerge from its Chapter 11 proceedings. Under the confirmed plan, Irving Tanning will continue its full operations in Hartland and all existing jobs are preserved. Irving Tanning's creditors voted overwhelmingly in favor of the plan. By agreement with its pre-bankruptcy lenders and suppliers, Irving Tanning's plan shaves more than $30 million in debt from its balance sheet, and the company ends its proceedings as a much stronger and more stable company, company officials said.

"This is a great day for the company, its customers, creditors and employees, and for this community and the state," said David Middleton, CEO of Irving Tanning. "We want to thank our customers and suppliers for sticking with us and helping us not only to reorganize but also to grow the business. We also commend the town for its cooperation and, most of all, congratulate our dedicated employees for making this happen. They are the finest employees in this industry and the reason the company has survived and will thrive in the future."

Banknorth, the parent company of Peoples Heritage Bank, provided exit financing for Irving Tanning. That financing is backed, in part, by loan guarantees from the Finance Authority of Maine ("FAME"). The bank supplied more than $16 million in new revolving credit and term-debt financing that the company will use to satisfy old debt and to provide working capital for future operations. "Banknorth stayed with the company and supported Irving Tanning when it needed support. Both Banknorth and FAME came through for the company," Middleton said.

Irving Tanning, a leading designer and manufacturer of high-quality leather for the global footwear, accessories and upholstery markets, began its operations in Hartland in 1936 and currently employs approximately 300 people at its facilities there. Irving Tanning filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code on March 29, 2001 amid declining U.S. shoemaking volume and the skyrocketing cost of cattle hides due to a worldwide supply shortage brought on by foot-and-mouth and mad-cow diseases.

Irving Tanning immediately embarked on an aggressive turnaround program that has included cost-cutting measures, improved manufacturing quality and efficiency, and new product and market development. The cattle hide market has declined and stabilized since its abnormal surge in the first half of 2001. Having returned to profitability and obtained the support of its lenders and other creditors, Irving Tanning was able to emerge from Chapter 11 as a stronger, leaner, revitalized company.

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