Bear Stearns Invests in Quarter Circle Capital's Commercial Real Estate Fund

Business Wire, Oct 26, 2006

NEW YORK -- The Bear Stearns Companies Inc., in coordination with its private equity affiliate, Bear Stearns Merchant Banking (BSMB), today announced an investment in Quarter Circle Capital's (QC Capital) newly formed QCC Fund I, L.P. The fund will acquire and manage distressed, non-performing and defaulted commercial real estate debt and fee interests in commercial real estate assets that have experienced distress or default in their capital structures.

With offices in Omaha, Nebraska and San Francisco, California, QC Capital is an investment firm recently established to continue the business operations of Magnum Capital Advisors, LLC, the predecessor company of QC Capital's partners Philip J. Gibson, John P. Martin and Starr P. Schulke. Magnum Capital Advisors, LLC, had been in the business of acquiring distressed commercial real estate debt and fee interests in distressed or defaulted commercial real estate assets since 1991. Continuing along a similar investment focus, QC Capital will manage the Fund and will make investments generally ranging in value from $2 million to $25 million.

"We look forward to working with the management team at Quarter Circle Capital. They have built a distinguished track record and we are optimistic about their prospects for the future," said Christopher Hoeffel, who - together with Randy Reiff - is co-head of the global Commercial Mortgage Backed Securities department at Bear Stearns. "This investment is part of Bear Stearns' efforts to diversify our commercial real estate lending business, mirroring the vertical integration of our residential platform."

"We are very pleased to have Bear Stearns as our capital partner in the Fund," said James R. Puckett, Chief Executive Officer. "Our interest is not simply in sourcing capital, but in sourcing strategic capital. Bear's experience in the commercial real estate finance sector runs extremely deep. They recognize the opportunity in our business strategy and we feel there are unique synergies between our companies."

"We have enjoyed working with Jim and the other members of the Quarter Circle team over the past few months structuring this investment for The Bear Stearns Companies," said David King, Senior Managing Director and Partner of BSMB. "We look forward to assisting Quarter Circle achieve its growth plans going forward."

About Bear Stearns:

Founded in 1923, The Bear Stearns Companies Inc. (NYSE: BSC) is the parent company of Bear, Stearns & Co. Inc., a leading investment banking, securities trading and brokerage firm. With approximately $61.9 billion in total capital, Bear Stearns serves governments, corporations, institutions and individuals worldwide. The company's business includes corporate finance and mergers and acquisitions, institutional equities and fixed income sales and trading, securities research, private client services, derivatives, foreign exchange and futures sales and trading, asset management and custody services. Through Bear, Stearns Securities Corp., it offers financing, securities lending, clearing and technology solutions to hedge funds, broker-dealers and investment advisors. Headquartered in New York City, the company has approximately 13,000 employees worldwide. For additional information about Bear Stearns, please visit the firm's web site at http://www.bearstearns.com.

About BSMB:

BSMB, the private equity affiliate of The Bear Stearns Companies Inc. (NYSE: BSC), invests private equity capital in compelling leveraged buyouts, recapitalizations and growth capital opportunities alongside superior management teams. BSMB focuses on making control or entrepreneur-driven investments, principally in middle-market retail, financial services and consumer products companies. Since its formation in 1997, BSMB has been an investor in over 50 portfolio companies. BSMB manages nearly $5 billion of private equity capital, including its new $2.7 billion institutional fund and capital dedicated to its affiliate, Bear Growth Capital Partners. Recent investments by BSMB include: ACA Capital Holdings, Balducci's, CamelBak Products, Cavalry Investments, Churchill Financial Holdings, Dairyland, Everything But Water, Harlem Furniture, Multi Packaging Solutions, New York & Company (NYSE: NWY), Reddy Ice (NYSE: FRZ), Seven For All Mankind, Stuart Weitzman, Transamerican Auto Parts Company and Vitamin Shoppe. More information about BSMB can be found at www.bsmb.com.

About Quarter Circle Capital:

Quarter Circle Capital, LLC makes principal investments in fundamentally sound real estate or debt secured by real estate, the value potential of which it perceives impaired by, among other things, stress caused by obligations of onerous capital structures, shifts in market conditions, property positioning and / or management. QC Capital's senior management includes Starr P. Schulke, Chief Investment Officer, Philip J. Gibson, Managing Director of Acquisitions, John P. Martin, Managing Director of Business Development and James R. Puckett, Chief Executive Officer. Messrs. Gibson and Martin began investing in distressed debt and fee interests in commercial real estate in 1991 and were joined by Mr. Schulke in 1997. Mr. Puckett joined Messrs. Schulke, Gibson and Martin in 2005 to extend the growth efforts of the company and head the company's executive and finance efforts. For more information about Quarter Circle Capital visit the company's Web site: www.qccapital.com.