Buffets Holdings, Inc. Subsidiaries Seek Court Authorization to Reject Master Lease (Press Release)

-- Chain Leader, 7/11/2008 8:09:00 AM

EAGAN, Minn.--(BUSINESS WIRE)--Buffets Holdings, Inc., ("the Company") announced today that several of its subsidiaries have filed a motion with the U.S. Bankruptcy Court for the District of Delaware seeking authorization to reject a master land and building lease for 129 of the Company's restaurants. The motion also seeks court authorization to close 127 of these locations by the end of August 2008. (Two restaurants covered by the master lease have previously been closed.)

The Company has already successfully concluded lease negotiations with landlords for its other restaurant locations. The Company has sought modifications to the onerous master lease from various affiliates of Fortress Investment Group LLC, the holders of the master lease, which would permit some or all of the 127 restaurants to remain open. While those negotiations have not been productive, the Company continues to explore a consensual resolution. A court hearing for the lease rejection motion has been scheduled for July 30, 2008.

In its motion, the Company describes a number of issues with the master lease, including above-market rents, mandatory annual rent increases of 2% or more, and other onerous provisions that provide little recourse when units perform poorly.

All but seven of the restaurants covered by the master lease in question operate under the Ryan's or Fire Mountain brand names. The 127 restaurants collectively have approximately 7,500 full and part-time employees.

Buffets Holdings, Inc. and all of its subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code on January 22, 2008. More information about Buffets Holdings' reorganization is available in the Company Information section of the Company's Web site at www.Buffet.com. Claims information and court filings are available at http://chapter11.epiqsystems.com/buf.

About Buffets Holdings

Buffets Holdings is the parent company of Buffets, Inc., the nation's largest steak-buffet restaurant company, which currently operates 569 restaurants in 39 states, comprised of 559 steak-buffet restaurants and 10 Tahoe Joe's Famous Steakhouse(r) restaurants, and franchises 17 steak-buffet restaurants in six states. The restaurants are principally operated under the Old Country Buffet(r), HomeTown Buffet(r), Ryan's(r) and Fire Mountain(r) brands. Buffets, Inc. employs approximately 33,000 team members and serves approximately 180 million customers annually. For more information about the Company, please visit our websites at www.Buffet.com and www.Ryansrg.com.

Safe Harbor Statement

The statements contained in this press release that are not historical facts are forward-looking statements, including references to the Company's plans in the context of a bankruptcy reorganization. These and other forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in, or implied by, the forward looking statements. Factors that may cause actual results to differ from the forward-looking statements in general are described in the "Risk Factors / Forward-Looking Statements" section in Buffets Holdings' Form 10-K/A filed with the Securities and Exchange Commission on March 31, 2008 and in Buffets Holdings' Quarterly report on Form 10-Q filed with the Securities and Exchange Commission on May 30, 2008. The statements in this release reflect Buffets Holdings' current beliefs based upon available information. Developments subsequent to this release are likely to cause these statements to become outdated, and no obligation is undertaken to update the information.