BFMA Accuses Morton's CEO and Other Directors Of Attempting to Misappropriate the Value of the Company for Themselves.

Business Editors

POMPANO BEACH, Fla.--(BUSINESS WIRE)--Nov. 9, 2001

BFMA Holding Corporation today accused Allen Bernstein, the Chairman and CEO of Morton's Restaurant Group, Inc. (NYSE: MRG), John Castle and Tom Baldwin, also directors of the company, of attempting, through misdirection and outright deception, to misappropriate the value of the company from the public shareholders.

In a letter from Barry W. Florescue, President and Chairman of the Board of BFMA, to Mr. Bernstein, Mr. Florescue openly questioned the fairness and sincerity of the purported sale process.

Mr. Florescue commented, "It was obvious to us over nine months ago that (Mr. Bernstein) and (his) management team were, and had been for a long time, attempting to capture the real value potential of Morton's for (themselves). In furtherance of this goal, (Mr. Bernstein) and (his) cronies took actions to depress the share price, granted (themselves) a tremendous number of options and used the company's desperately-needed cash to repurchase its own stock. The result was substantially to increase the percentage of the company owned by (Mr. Bernstein) and those friendly to (him). (Mr. Bernstein) also issued new and substantial "golden parachutes" to a large number of (his) employees to make it more expensive for a third-party to buy the company. Only after BFMA launched a proxy fight to call attention to this egregious behavior did (they) agree to stop some of these actions. In addition, in order to save (their) jobs and (their) directorships, (they) committed to the institutional stockholders who elected (Mr. Bernstein), John Castle and Tom Baldwin as directors to explore strategic alternatives, including the sale of the company."

Mr. Florescue was critical of the lack of action by the "special committee" created to explore these alternatives. Six months ago, BFMA made a fully financed offer for Morton's Restaurant Group, Inc. at $28.25 per share. Mr. Florescue's letter states that "Since that time, (Mr. Bernstein), John Castle and Tom Baldwin have thwarted (BFMA's) every effort to acquire Morton's. In doing so, (they) have made a number of false, misleading and disparaging statements about BFMA and its principals. ...With the stock now at just over $12.00, each public shareholder has lost more than $16.00 per share as a direct result of (their) actions."

Mr. Florescue's letter indicates that BFMA was very recently informed that John Castle stepped down from the special committee several months ago and that the company failed to disclose this fact. The letter states that "...prior to Mr. Castle's departure from the special committee, he managed the process in such as way as to thwart all third-party efforts (including BFMA's) to buy Morton's. We can only suspect that Mr. Castle's motivation to resign from the special committee without also resigning from the board of directors is that he intends to submit a "low-ball" bid to acquire Morton's. Despite his resignation from the special committee, his continued presence and the presence of his associates on the board of directors will allow him to manipulate the sale process to his advantage. This is further evidence of (Mr. Bernstein's) plan to hide behind a feigned sale process and to allow (he and his) cronies to steal the company away from the public stockholders at a substantially lower price than the $28.25 per share BFMA had offered. Only a few months ago, (Mr. Bernstein and Mr. Baldwin) were telling stockholders that (BFMA's) offer was inadequate. Since then the stock has fallen over 50% and so far (the company's management has) done very little to improve the situation."

In his letter, Mr. Florescue reiterated BFMA's interest in acquiring the company but expressed his concern that the special committee's conditions to permitting BFMA to perform its necessary due diligence were too restrictive and not in the best interest of the shareholders implying that these type of restrictions would only favor an inside buyer of the company. Mr. Florescue's letter continued to state "Notwithstanding the recent tragic events, we believe that any offer less than $20 per share today would significantly undervalue the company. Despite (Morton's) poor management and despite the current difficult economic times, we believe that the value of the Morton's franchise remains strong."

Mr. Florescue continued, "We are appalled by the actions of (Mr. Bernstein) and (the company's) board thus far. It is clear to us that the board has failed to provide independent and ethical oversight to this process. Unless the sale process recently announced by the company is demonstrated to be fair, open and equal to all parties, (Mr. Bernstein) can expect (BFMA) to continue to be a shareholder activist. We will not stand by idly and let (Mr. Bernstein), John Castle and Tom Baldwin steal value away from the public stockholders."