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DIVERSIFIED INDUSTRIES FILES FOR CHAPTER 11 PROTECTION TO RESTRUCTURE AROUND PRECIOUS METALS RECLAIMING SUBSIDIARY

 ST. LOUIS, Mo., March 5 /PRNewswire/ -- Diversified Industries Inc. (NYSE: DMC) announced today it has filed a voluntary petition for reorganization under Chapter 11 of the Federal Bankruptcy Code in the United States Bankruptcy Court, Eastern District of Missouri. The filing by the company includes its Plume & Atwood Brass Mill Division located in Thomaston, Conn., which manufactures brass strip, but does not include United Refining & Smelting Co., a Chicago-based secondary refiner of precious metals. United will be the focus of a reorganization plan designed to return the corporation to a sound financial footing.
 Under Chapter 11, a company continues to operate under court protection from creditors while preparing a plan for reorganization to pay its creditors. Diversified indicated that its principal lender, The First National Bank of Chicago, has agreed to provide funding for the company on an interim basis, subject to court approval, while efforts continue to sell its Plume & Atwood Division. Negotiations are currently in process to sell this division to an employee-led investor group.
 David C. Stuebe, president and chief executive officer of Diversified, stated, "We enter Chapter 11 only by necessity after months of painstaking and diligent work aimed at securing the credit we need. It became unmistakably clear that sufficient financing could not be arranged." The company announced on Feb. 11, 1993 that The Chase Manhattan Bank, the secured creditor to Diversified Metals Corporation, the company's metal trading subsidiary, was unwilling to continue extending credit, thus forcing liquidation of that operation. The liquidation of Diversified Metals is proceeding and will not be affected by the Chapter 11 filing of the parent company. Diversified Metals represented approximately 80 percent of the annual sales of Diversified Industries and the liquidation of this operation has caused the suspension of trading and probable delisting of the company's common stock on the New York and Pacific Stock Exchanges.
 Stuebe stated, "The economic recession and the decline of available credit had a negative effect on the company's overall sales and profitability over the last few years." The company reported a loss of $21,977,000 for the fiscal year ended Oct. 31, 1992. Stuebe further noted the company had received a waiver of prior defaults from a majority of the holders of its 11-1/2 percent Senior Subordinated Debentures due 1993 until March 1, 1993, however was unable to raise the funds necessary to cure the default. "Without adequate credit and financing, we are following the only prudent course available to us. By seeking this protection and affording the company an opportunity to restructure its debt, we believe we can successfully rebuild the company around United Refining." The filing by Diversified Industries indicates the company has approximately $21 million of assets and $26 million of debt owed to its creditors. The filing will affect approximately 100 employees.
 In commenting on the company's turnaround plan, Stuebe stated, "United Refining has been consistently profitable since it was acquired by Diversified in 1969. The company reclaims gold, silver, platinum and other precious metals from electronic and computer scrap utilizing environmentally safe methods. United's sound cash flow and significant earnings allow this subsidiary to operate without the need of a bank credit line. We believe there are few, if any, domestic high-grade scrap recyclers that are as well run and profitable as United," Stuebe said. "There are major opportunities for this business domestically and in the European economic community, especially Eastern Europe. We are pursuing these opportunities very aggressively. As part of the plan of reorganization, United's management plans to explore a strategy to acquire other companies engaged in complementary recycling businesses. We are confident the reorganization plan we are developing will enable us to not only recover, but to emerge as a viable and dynamic concern," Stuebe said.
 "Throughout this difficult period, we are dedicated to safeguarding the interests of our shareholders, employees, customer and creditors," Stuebe said. "We understand the great concern a Chapter 11 filing can create. We want everyone connected with our company to know how strongly we believe that we can weather the storm and ensure long-term viability for our company."
 -0- 3/5/93
 /CONTACT: David C. Stuebe of Diversified Industries, 314-862-8200/
 (DMC)


CO: Diversified Industries Inc.; United Refining & Smelting Co. ST: Missouri IN: MNG SU: RCN

MC -- DV001 -- 3419 03/05/93 11:44 EST
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Date:Mar 5, 1993
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