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THE FOOTHILL GROUP INC. ANNOUNCES COMPLETION OF FIRST PHASE OF NEW FUND

 LOS ANGELES, Dec. 23 /PRNewswire/ -- The Foothill Group Inc. (NYSE: FGI) announced that its Foothill Partners II L.P. has, in its first closing, successfully raised $234 million in commitments to invest in senior loans of distressed companies. The final close of this new partnership is scheduled for March 31, 1993. Merrill Lynch & Co. acted as exclusive financial advisor and placement agent in this private placement offering.
 Foothill Partners II L.P. will target investments in performing and nonperforming senior loans.
 "We're extremely pleased with the high level of interest in this new fund by sophisticated institutional investors," said Don L. Gevirtz, chairman and chief executive officer.
 Gevirtz noted that the average commitment by institutional investors in the new fund was $25 million.
 Foothill is a recognized leading investor in distressed senior loans. It has been investing its own capital in distressed senior loans since 1983 and has realized returns on completed transactions in excess of 30 percent for its own account and for its institutional investors.
 In most instances, Foothill will purchase a controlling position for the fund in senior debt to influence reorganization outcomes at the targeted companies. The Foothill Group Inc. will serve as the corporate general partner for the fund.
 "An inefficient market exists for debt securities of troubled companies," said John F. Nickoll, president and co-chief executive officer. "However, you have to know how to evaluate companies, their collateral, and their management to realize significant returns. Sellers in this market are often driven by regulatory or capital adequacy concerns and can, at times, lose sight of inherent economic opportunities. You have to know where the inefficiencies exist."
 Nickoll noted that in a recent study commissioned by Foothill, the estimated total book value of defaulted and distressed securities was approximately $284 billion. Of this amount, only $10 billion is currently being managed by investors and money managers specializing in this area.
 "This discrepancy represents significant upside potential if you know what you're doing and can take advantage of individual situations," Nickoll said. "That's the purpose of our fund."
 Foothill has managed three other funds since 1988, representing commitments of more than $232 million.
 The Foothill Group Inc. is a financial services company engaged in the commercial finance and asset management businesses. Foothill Capital Corp., its largest subsidiary, provides asset-based financing secured by accounts receivable, inventory, equipment and other assets to businesses nationwide. Foothill Thrift and Loan specialized in providing commercial and industrial loans secured by real estate to small and medium-sized businesses in California. The Capital Markets Division (parent company) manages institutional limited partnerships which invest in the debt of companies which are in reorganization or in the process of restructuring.
 -0- 12/23/92
 /CONTACT: David C. Hilton, executive VP of the Foothill Group, 310-996-7000/
 (FGI)


CO: The Foothill Group Inc.; Foothill Partners II L.P. ST: California IN: FIN SU:

MS-LS -- LA011 -- 9440 12/23/92 09:01 EST
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Publication:PR Newswire
Date:Dec 23, 1992
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