Bankruptcy Court Approves Global Settlement of NorthWestern Corporation's Litigation with Magten Asset Management and Law Debenture Trust Company of New York

SIOUX FALLS, S.D., July 10 /PRNewswire-FirstCall/ -- NorthWestern Corporation d/b/a NorthWestern Energy ("NorthWestern") today announced that the U.S. Bankruptcy Court for the District of Delaware has approved a settlement agreement by and among, inter alia, NorthWestern, Magten Asset Management ("Magten"), Law Debenture Trust Company of New York ("Law Debenture") and the Plan Committee that resolves the litigation related to claims of holders of quarterly income preferred securities (the "QUIPS") in NorthWestern's Chapter 11 bankruptcy case.

Under the settlement agreement, Magten, Law Debenture and the holders of the QUIPS, will collectively receive a cash payment of $23 million to be allocated amongst them in accordance with the terms of the settlement agreement. The cash payment will be funded principally by NorthWestern's repurchase of stock held in the disputed claims reserve established under NorthWestern's confirmed Plan of Reorganization (the "Plan"). In addition, NorthWestern will receive a reimbursement of previously incurred legal fees and expenses of $4 million under separate agreements for which no Court approval was requested.

After the distributions under the settlement agreement have been completed, there will be a supplemental distribution of all of the remaining assets in the disputed claims reserve to unsecured creditors and debt holders in Class 7 and Class 9 under the Plan, other than the holders of the QUIPS. The value of the supplemental distribution to each of these unsecured creditors and debt holders is not presently known.

"This settlement resolves the last major claim from our 2003 Chapter 11 bankruptcy case, and we will now be able to put closure on that piece of our past and focus on providing exceptional value for our shareholders in the future," said Michael J. Hanson, President and Chief Executive Officer.

More information on all proceedings on this matter can be found at http://www.kccllc.net/northwestern.

About NorthWestern Energy

NorthWestern Energy is one of the largest providers of electricity and natural gas in the Upper Midwest and Northwest, serving approximately 650,000 customers in Montana, South Dakota and Nebraska. More information on NorthWestern Energy is available on the Company's Web site at http://www.northwesternenergy.com/.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements often address our expected future business and financial performance, and often contain words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," or "will." These statements are based upon our current expectations and speak only as of the date hereof. Our actual future business and financial performance may differ materially and adversely from those expressed in any forward-looking statements as a result of various factors and uncertainties, including, but not limited to:

-- our ability to avoid or mitigate adverse rulings or judgments against us in our pending litigation;

-- unanticipated changes in availability of trade credit, usage, commodity prices, fuel supply costs or availability due to higher demand, shortages, weather conditions, transportation problems or other developments;

-- unscheduled generation outages or forced reductions in output, maintenance or repairs;

-- adverse changes in general economic and competitive conditions in our service territories; and

-- potential additional adverse federal, state, or local legislation or regulation or adverse determinations by regulators.

Our Annual Report on Form 10-K, recent and forthcoming Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K and other Securities and Exchange Commission filings discuss some of the important risk factors that may affect our business, results of operations and financial condition. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

CONTACT: media, Claudia Rapkoch, 1-866-622-8081, claudia.rapkoch@northwestern.com, or investors, Dan Rausch, +1-605-978-2902, daniel.rausch@northwestern.com

Web site: http://www.northwesternenergy.com/

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