MCG Capital Corporation 2010 Poor Financial Performance and Third Consecutive Year of Net Asset Value Declines Criticized by Western Investment LLC

NEW YORK, March 4, 2011 /PRNewswire/ -- Western Investment LLC, a long-term stockholder in MCG Capital Corporation (Nasdaq: MCGC), today commented on MCGC's abysmal 2010 financial results, raising serious concerns with MCGC's continued underperformance and decline in Net Asset Value or NAV.  

Arthur D. Lipson, managing member of Western Investment, stated, "As long-term stockholders in MCGC we have grown increasingly concerned with the Company's long-term NAV underperformance relative to its peers.  MCGC has announced another year of below market, disappointing performance and declining NAV.  MCGC's NAV returns have underperformed comparable indices, the Merrill Lynch High Yield Index and the Russell 2000 Index, over the past 1-, 2- and 3-year periods."

MCGC's NAV declined from $8.06 in 2009 to $7.54 in 2010, the third consecutive year of decline. MCGC's cumulative NAV total return has also dramatically lagged comparable benchmarks, underperforming by double digit amounts, as shown in the table below:  

Mr. Lipson continued, "It has been two years since the depths of the financial crises and MCGC stockholders should be seeing real improvement in NAV at this point, similar to stockholders in comparable investments.  While other comparable companies are moving forward, MCGC's NAV continues to decline."

Western Investment is also announcing that it has nominated three independent director nominees for election at MCGC's 2011 Annual Meeting.

Mr. Lipson explained, "MCGC is at a critical juncture.  Management continues to underwhelm us with little to no accountability for their performance.  We believe that improved performance requires nothing less than a renewed emphasis on management accountability at the Board level.  That is why we have nominated independent director nominees for election at MCGC's 2011 Annual Meeting. We believe our nominees have the necessary ability and desire to assist MCGC shareholders in addressing the Company's long-term underperformance and will effectively assist management in delivering the performance stockholders deserve."

CONTACT:  Arthur D. Lipson, (801) 568-1400

CERTAIN INFORMATION CONCERNING PARTICIPANTS

Western Investment LLC ("Western Investment"), together with the other Participants (as defined below), intends to make a preliminary filing with the Securities and Exchange Commission ("SEC") of a proxy statement and accompanying proxy card to be used to solicit proxies for the election of its slate of director nominees at the 2011 annual meeting of stockholders of MCG Capital Corporation (the "Company").

WESTERN INVESTMENT STRONGLY ADVISES ALL STOCKHOLDERS OF THE COMPANY TO READ THE PROXY STATEMENT AS IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION.  SUCH PROXY STATEMENT WILL BE AVAILABLE AT NO CHARGE ON THE SEC'S WEBSITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE PARTICIPANTS IN THE SOLICITATION WILL PROVIDE COPIES OF THE PROXY STATEMENT WITHOUT CHARGE UPON REQUEST.  

The participants in the solicitation are anticipated to be Western Investment, Western Investment Hedged Partners L.P. ("WIHP"), Western Investment Institutional Partners LLC ("WIIP"), Western Investment Activism Partners LLC ("WIAP"), Western Investment Total Return Fund Ltd. ("WITRL"), Western Investment Total Return Partners L.P. ("WITRP"), Arthur D. Lipson, Benchmark Plus Institutional Partners, L.L.C. ("BPIP"), Benchmark Plus Management, L.L.C., Robert Ferguson, Scott Franzblau, Gregory R. Dube, John G. Grau and Robert A. Wood (collectively, the "Participants").  As of the date hereof, the Participants collectively own an aggregate of 1,028,508 shares of Common Stock of the Company, consisting of the following (1) 337,623 shares owned directly by WIHP, (2) 396,809 shares owned directly by WIIP, (3) 100 shares owned directly by WIAP, (4) 100 shares owned directly by WITRL, (5) 100 shares owned directly by WITRP and (6) 292,776 shares owned directly by BPIP.

SOURCE Western Investment LLC