Morgan Financial Corporation Announces Earnings

Business Wire, August 8, 1996

TORONTO--(BUSINESS WIRE)--Aug. 8, 1996--MORGAN FINANCIAL CORP. (TSE: MFT ) today announced earnings for the six months ended June 30, 1996 of $634,000 compared to $2,384,000 in the same period for 1995. For the three months ended June 30, 1996, earnings were $299,000 compared to $1,033,000 in the corresponding period of 1995. The significant reduction in Morgan's earnings from 1995 results from the sale of Westbury Canadian Life of Canada, effective December 31, 1995, to a subsidiary of Royal Bank of Canada on June 13, 1996.

On June 5, 1996, the shareholders approved Morgan's dissolution. The board of directors intends to distribute Morgan's net asset value to the shareholders and dissolve Morgan as soon as practicable. At this stage, distribution and dissolution is unlikely to occur before mid-1997. Management's best estimate of Morgan's distributable asset value remains approximately 8.4 cents a share.

The distribution and dissolution could be delayed by a dissent and appraisal action by three Morgan shareholders holding a total of 3,348,000 shares. The shareholders have exercised their right of dissent on the sale of Westbury and have demanded fair market value for their shares. Morgan's board has determined that fair market value of the Morgan shares on June, 4, 1994. (the relevant date) was eight cents a share and Morgan has offered to buy the shares of the dissenting shareholders at this price. Morgan has filed a statement of claim asking the court to confirm the fair value of Morgan shares as eight cents a share. If the dissenting shareholders decide to contest this claim, Morgan may be forced to incur additional costs and the dissolution could be delayed.

CONTACT: Morgan Financial Corporation

J. Rob Collins, 416/863-2519