All American Semiconductor, Inc. Receives Court Approval of First Day Motions

Court Approves Payment of Prepetition Employee Expenses, Interim Debtor-in- Possession Financing and Process for Going Concern Sale



MIAMI, May 3  /PRNewswire-FirstCall/ -- All American Semiconductor, Inc. (Pink Sheets: SEMI.PK), a distributor of semiconductors and other electronic components, today announced the approval of its first day motions by the U.S. Bankruptcy Court for the Southern District of Florida, Miami Division.  The Company received approval of first day motions seeking relief to enable the Company to continue operations during the Chapter 11 process, including debtor-in-possession (DIP) financing from its existing bank group, and the payment of prepetition, employee-related and certain customer obligations.

In addition, All American received Bankruptcy Court approval of bidding procedures for an auction sale of its businesses as a going concern to be completed no later than June 8, 2007.

The Court approved interim DIP financing of up to $13 million, which is expected to provide the Company with sufficient liquidity to continue operations during the Chapter 11 case and is based on a budget agreed upon with the bank group.  The final hearing on DIP financing is scheduled to be held on May 17.

"We are pleased with this outcome," said Bruce Goldberg, President and CEO of All American.  "The Court's approval of our motions allows All American to continue as a going concern as we work towards an auction sale of the business."

The approved sale process provides for interested purchasers to complete due diligence and submit binding bids by May 28, 2007, with the auction scheduled for May 31 at the Miami offices of the Company's counsel, Squire, Sanders & Dempsey, L.L.P.  The hearing to approve a sale to the highest bidder at the auction is scheduled for June 5, 2007, with the sale closing no later than June 8.

Prior to the Company's bankruptcy filing, it signed a nonbinding letter of intent with a potential purchaser of substantially all of the Company's and its subsidiaries' assets.  The Company advised the Bankruptcy Court that it is actively negotiating a binding purchase agreement with this party to become the stalking horse for the sale.  In the event such an agreement is reached, specific stalking horse protections, including a breakup fee, will be subject to the approval of the DIP lenders and the Bankruptcy Court.  In addition, a sale to the highest bidder at the auction will also require the approval of the Bankruptcy Court.

On April 25, 2007, All American filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code.  The filing included the Company's 33 subsidiaries in the United States, Canada, Mexico, Europe and Asia.  All American determined to file for relief under Chapter 11 after extensively exploring and carefully evaluating all of its options.  All American believes that the Chapter 11 process provides the best alternative for maximizing the value of the Company for the benefit of its stakeholders including suppliers, customers and employees.

About All American Semiconductor, Inc.

All American is a Delaware corporation with its principal place of business in Miami, Florida.  It also maintains corporate offices for West Coast operations in San Jose, California.  All American is a distributor of electronic components manufactured by others.  The Company distributes a full range of semiconductors including transistors, diodes, memory devices, microprocessors, microcontrollers, other integrated circuits, active matrix displays and various board-level products.  All American also distributes passive components such as capacitors, resistors and inductors; and electromechanical products such as power supplies, cable, switches, connectors, filters and sockets.  All American also offers complete solutions for flat panel display products.  In total, the Company offers approximately 40,000 products produced by approximately 60 manufacturers.  These products are sold primarily to original equipment manufacturers in a diverse range of industries such as manufacturers of computers and computer-related products, networking, satellite, wireless and other communications products; Internet infrastructure equipment and appliances; automobiles and automotive subsystems; consumer goods; voting and gaming machines; defense and aerospace equipment; and medical instrumentation.  The Company also sells products to contract electronics manufacturers who manufacture products for companies in all electronics industry segments.

"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This press release contains statements that are forward-looking within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  When used in this press release, the words "expected," "intends, "may," "will," "shall," and similar expressions, to the extent used, are intended to identify the forward-looking statements.  In addition, to the extent that this press release makes statements about or refers to the Chapter 11 bankruptcy filing and results or effects thereof, DIP financing from the existing bank group, a sale of the Company's and its subsidiaries' businesses, Bankruptcy Court or existing bank group approval of any asset sale or any other transaction, or otherwise makes statements about or refers to future expectations, beliefs or intentions about the Company's future operations, such statements are forward-looking statements.  All forward-looking statements are subject to a number of risks and uncertainties that could cause actual results, performance, achievements or transactions to differ materially from the statements made.  Factors that could adversely affect the Company's future results, performance, achievements or transactions include, without limitation: failure of the Company to obtain Bankruptcy Court approval of any sale of its assets or any other transactions or activities involving the Company; the Company's failure to access sufficient funds from the Bankruptcy Court approved DIP financing to provide it with funding to facilitate the Chapter 11 bankruptcy process and the approved sale process; the Company's ability to satisfy the subsequent conditions that would allow it to continue to access additional DIP financing from its lenders; the failure of the potential third party purchaser of the Company's assets to be satisfied with its due diligence; the failure of the Company and its subsidiaries to reach and execute a mutually satisfactory definitive purchase and sale agreement with the potential third party purchaser or consummate the transaction at all or on the terms set forth in the letter of intent; the failure to satisfy all of the conditions to complete the sale of the Company's assets to the third party, some of which are set forth in this press release; the level and extent of effectiveness of certain cost cutting measures by the Company implemented or required to be implemented and the impact of those cost cutting measures on the ability of the Company to operate while it attempts to complete a sale of its assets; the Company's ability to preserve the value of its assets while it attempts to complete a sale of its assets; the failure of the Company to better align the Company's expenses with its current operating environment; the Company's failure to obtain competing bids from third parties for the purchase of its assets in order to obtain the best possible price in the sale process; the Company's failure to find purchasers of its assets that will continue to be financially sound and in a stronger position than the Company to employ its employees on an on-going basis; further and continuing deterioration in the Company's relationships with existing suppliers and customers; additional losses of suppliers and customers; the continuing and increasing slowdown in sales or that slowdown being greater than the Company expects; the closing of additional sales offices and/or other facilities; further voluntary or involuntary reductions of the Company's workforce; and other uncertainties, risks and factors, including those described in the Company's reports on Forms 10-K, Forms 10-Q, Forms 8-K and other press releases.  These risks and uncertainties are beyond the ability of the Company to control.  In many cases, the Company cannot predict the risks and uncertainties that could cause actual results to differ materially from those indicated by the forward- looking statements.  The Company undertakes no obligation to update publicly or revise any forward-looking statements, business risks and/or uncertainties. 

DATASOURCE: All American Semiconductor, Inc.



CONTACT:  Maria Leonhauser, [phone], [phone], mobile,

  

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