Search Financial Services Obtains Confirmation of Plan of Reorganization.

DALLAS--(BUSINESS WIRE)--Nov. 12, 1998--Search Financial Services Inc. ("SFSI") announced today that the Bankruptcy Court has confirmed the previously announced Third Amended Plan of Reorganization (the "Plan") of SFSI and its subsidiaries, Search Financial Services Acceptance Corp., MS Financial, Inc. and Search Funding Corp. (with SFSI, the "Debtors").

In general, the Plan provides for the substantive consolidation of the Debtors and the liquidation of the Debtors' remaining assets for the benefit of a Trust and the Trusts' beneficiaries. The Plan also contemplates a sale of SFSI's consumer finance operations (or, alternatively, a sale of an interest in those operations) with the proceeds to be received by the Trust for distribution to Trust beneficiaries. Those beneficiaries are, first, the Debtors' creditors. If all allowed creditor claims are satisfied, then preferred shareholders would receive distributions from the Trust. However, it is not likely that preferred shareholders will receive any distribution, although a distribution to them is possible depending on the value realized for the Debtors' assets, including the consumer finance operations. Further, it is contemplated that neither holders of common stock nor holders of warrants will receive any distributions. All preferred stock, common stock and warrants of SFSI are cancelled under the terms of the Plan.

There can be no assurance that a sale of all or a part of SFSI's consumer finance operations will be consummated. If no acceptable bid for a purchase of or investment in those operations is received, the Trustee of the Trust will be free to operate the consumer finance business, liquidate the assets of that business or take any other action deemed appropriate by the Trustee to maximize value for the beneficiaries of the Trust.

The Plan settles all of the Debtors' claims against Hall Phoenix/Inwood, Ltd. ("Phoenix") in exchange, among other things, for Phoenix's agreement to advance any funds necessary for payment of allowed administrative and priority payment claims, the payment of which are a condition to confirmation of a plan under the Bankruptcy Code. Phoenix is also required to loan up to $500,000 to the consumer finance companies to finance their operations.

Search Financial Services Inc. was a specialized financial services company engaged in the purchasing, financing, and servicing of non-prime automobile installment loans originated by franchised and independent automobile dealers. Search discontinued purchasing non-prime automobile installment loans in early February 1998. Search's consumer finance subsidiaries continue to purchase, finance, and service direct non-auto consumer finance and home equity loans generated through their 19 branch offices located in six states and in Puerto Rico.