ROSE FURNITURE AND ITS CREDITORS COMMITTEE REACH AGREEMENT IN PRINCIPLE ON PAYOUT PLAN
PRESS RELEASE

Contacts:
For Rose:
James H. Cullen
Alliance Management
(952) 475-2236

For Committee:
Angela Mills
Bernhardt Furniture Company
(828) 759-6395

Judy D. Thompson
Poyner & Spruill LLP
(704) 342-5299

High Point, North Carolina, February 2, 2007

Rose Furniture Company, Rose Furniture Clearance LLC, and a committee of their key vendors and unsecured creditors announced today that they have reached an agreement in principle on a payout plan designed to allow Rose to stay in business while also paying its creditors more than they would otherwise receive on account of their claims if Rose?s assets were liquidated in a Chapter 7 bankruptcy.

Among other details, the Rose payout plan provides for general unsecured creditors to receive a cash payment equal to 11.5% of their allowed claims within 15 days after the plan becomes effective. In addition, and at their sole discretion, general unsecured creditors will receive either (a) periodic cash payments over approximately twenty-four months time in an aggregate amount equal to 18.5% of their allowed claims, or (b) a second cash payment equal to 3.5% of their allowed claims 45 days after the plan becomes effective. The plan also provides for consumers with cash deposits to receive a 50% cash payment 30 days after the plan becomes effective and either an additional 50% cash payment or a 100% store credit 180 days after the plan?s effective date.

The payout plan is contemplated to be achieved without the necessity of filing a formal Chapter 11 bankruptcy case. The reason for this is the substantial cost savings to Rose and resulting availability of cash to pay creditors. The out-of-court agreement will require an acceptance threshold of 90% of the total claims. The creditors committee will work with Rose to educate creditors regarding the terms of the proposal.

?We?re absolutely delighted to be able to stay in business, and we are extremely grateful for the continued support and patience of our vendors and customers,? said Buck Kester, Rose?s president. ?With the benefit of that continued support as well as a new business model and merchandising format, we expect to hit the ground running with the same terrific furniture bargains that have been the hallmark of Rose Furniture for more than 80 years.?

Family owned and operated since 1925, Rose Furniture Company and its affiliate, Rose Furniture Clearance LLC, are privately held furniture retailers. Together, they operate two retail locations in High Point, North Carolina.

AND LETTER FROM ROSE FURNITURE PRESIDENT:
LETTER FROM THE PRESIDENT OF ROSE FURNITURE COMPANY

February 5, 2007

Dear Rose Customer:

Before I share some good news, I would like to thank you for your trust and business. As you may know, the past several months have been difficult and challenging for all of us at Rose Furniture. At one point, we thought we would have to liquidate and close the business. However our inventory reduction sale was more successful than we anticipated. This will allow us to remain in business and, with some important changes, Rose will emerge stronger.

This is good news for all our customers who experienced disappointment over purchases, deposits and deliveries.

Rose recently reached an agreement in principle with its creditors? committee on a payout plan designed to allow us to stay in business while also paying creditors more than they would otherwise receive on account of their claims if Rose?s remaining assets were liquidated in a Chapter 7 bankruptcy. Among other details, the agreement provides for customers with outstanding cash deposits to receive a 50% cash refund 30 days after the plan becomes effective, and then, 180 days later, to receive either an additional 50% cash refund or a store credit in the amount of 100% of their deposit. (In other words, those customers
who choose the second alternative will effectively receive value worth 150% of the amount of their outstanding deposit.) The agreement also provides for Rose?s general unsecured creditors and trade vendors to receive payments totaling 15% or 30% of their claims depending on whether they choose a quick payout or a payout over time. We will update you with more specific details once we have finalized and documented the agreement.
The Rose turnaround has involved teamwork. We?ve been working with smart business professionals and merchandising consultants. These specialists have made us be more efficient and thereby allowing us to dramatically reduce operating costs.

As you will see, Rose is employing a new business model and merchandising format. We will be conducting an ongoing ?remodeling? sale of our special inventory, in addition to special purchases continually coming our way.

Our speedy business recovery is the best way to express our gratitude to you. During this transition period, you can keep up with our changes. Get updates on our changing website, www.rosefurntiure.com, or better yet: Come to the store and discover some terrific bargains as we change.

Again, thank you for your continued business. Sincerely, To unsubscribe click here, call (336) 886-6050 or contact us directly at:

Rose Furniture Company EMail Removal
916 Finch Avenue
High Point, NC 27263