Jackson Hewitt Tax Service Inc. (fka JHTXQ)

[airbus300]

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***In order to implement the financial restructuring, Jackson Hewitt and its subsidiaries today filed voluntary petitions for reorganization under chapter 11 in the U.S. Bankruptcy Court for the District of Delaware. The Company also filed, with the petitions, a pre-packaged plan of reorganization that contains the terms of the restructuring agreed to with the company's lenders.

Since Jackson Hewitt has already received all of the necessary approvals from its secured lenders for the proposed Plan, it will request that the Court confirm the Plan on an expedited basis. In the interim, Jackson Hewitt's franchisees will experience no changes in their day-to-day business activity and Jackson Hewitt clients will have continual access to tax preparation services at Jackson Hewitt offices nationwide.

Under the terms of the proposed Plan, Jackson Hewitt's current secured lenders will receive their pro rata share of a new $100 million term loan and all of the equity in the reorganized enterprise. The Company also anticipates entering into a new $115 million revolving credit facility upon consummation of the Plan. It is anticipated that upon consummation of the proposed Plan, Jackson Hewitt's new equity will be privately held. Under the proposed Plan, all of the Company's existing common stock will be cancelled upon Jackson Hewitt's emergence from bankruptcy.