Lone Star Answers Accredited's Complaint and Files Counterclaims in Delaware Court

    DALLAS, Aug. 20 /PRNewswire/ -- LSF5 Accredited Investments, LLC ("Lone
 Star"), a subsidiary of Lone Star Fund V (U.S.), L.P., today announced that
 that it has filed an answer and counterclaims in response to the complaint
 filed on August 13 by Accredited Home Lenders Holding Co. ( LEND)
 ("Accredited") in the Court of Chancery for New Castle County, Delaware.
     In its answer, Lone Star categorically denies Accredited's claims that
 Lone Star is in breach of its obligations under the merger agreement with
 Accredited and that it has repudiated the merger agreement. Lone Star also
 asserted that Accredited would never be entitled to an injunction enforcing
 the merger agreement against Lone Star in any event, because Accredited's
 only possible contractual remedy is a reverse break-up fee of $12 million.
     Lone Star's counterclaims seek court declarations that Accredited has
 not met the conditions to closing the current tender offer because it has
 suffered a Material Adverse Effect, as defined in the Merger Agreement, and
 has materially breached numerous other obligations to Lone Star. Based on
 these and other claims, Lone Star believes it is entitled to terminate the
 merger agreement at its option any time and Lone Star is seeking a court
 order to that effect.
     As previously announced, on June 4, 2007, Accredited and Lone Star Fund
 V (U.S.), L.P., through its affiliates LSF5 Accredited Merger Co., Inc.
 ("Purchaser") and Lone Star, entered into a definitive merger agreement
 pursuant to which Lone Star and Purchaser agreed to acquire all of the
 common stock of the Accredited in an all-cash tender offer. The merger
 agreement was subsequently amended on June 15, 2007 by Lone Star, Purchaser
 and Accredited. Pursuant to the merger agreement, as amended, Lone Star and
 Purchaser have extended the tender offer on three occasions: July 17th,
 July 30th, and August 14th, 2007.
     About Lone Star Funds
     Lone Star is a leading U.S. private equity firm. Since 1995, the
 principals of Lone Star have organized private equity funds totaling more
 than $13.3 billion to invest globally in corporate secured and unsecured
 debt instruments, real estate related assets and select corporate
 opportunities. Additional information may be found at
 www.lonestarfunds.com.
 
 

SOURCE Lone Star Fund