Granite Broadcasting Corporation Preferred Stockholders Announce Exercise of Right To Elect Two Directors

Granite Broadcasting Corporation Preferred Stockholders Announce Exercise of Right To Elect Two Directors

Preferred Stockholders feel that, as a result of Granite's financial condition, its Board of Directors has a fiduciary duty to all stakeholders - not just the holders of common equity

NEW YORK, Oct. 25 /PRNewswire/ -- Harbert Distressed Investment Master Fund, Ltd. ("Harbert") today announced that the holders of a majority of the shares of 12-3/4 % Cumulative Exchangeable Preferred Stock of Granite Broadcasting Corporation ("Granite"), including Harbert, John Hancock High Yield Fund and funds managed by Somerset Capital Advisers, have advised Granite that they have exercised their right to elect two directors to the Board of Directors of Granite (the "Board"). The holders have voted to elect Eugene I. Davis and Kirk W. Aubry to the Board. The holders have the right to elect two directors due to Granite's failure to pay required dividends on the Preferred Stock for more than three semi-annual dividend periods.

"We are very concerned about the direction of Granite. Selling assets to fund interest payments and continuing losses is not a viable business plan," said Philip A. Falcone, Senior Portfolio Manager of Harbert. "Granite is highly leveraged and, with its current capital structure, we do not believe that it will be able to meet its ongoing and long-term obligations. In light of Granite's financial situation, we are extremely concerned about the anticipated uses of net proceeds expected to be received from the $180 million sale of the two WB-affiliated television stations recently announced by Granite. We believe that Gene Davis and Kirk Aubry, both of whom have significant experience in assisting companies in need of restructuring, will be able to assist the Granite Board in exercising their fiduciary duties and making responsible decisions in managing the company's assets and operations."

Eugene Davis has served as chairman and chief executive officer of Pirinate Consulting Group, L.L.C., a consulting firm that specializes in, among other things, crisis and turn-around management, mergers and acquisitions and strategic planning services, since 1999. He has also served as the chief executive officer, chief operating officer, president and director of a number of other companies in need of turn-around management services.

Kirk Aubry has also assisted companies in restructuring operations. He is currently serving as the chief operating officer of Cadence Innovation LLC where he has worked since April of 2005. From 2001 to 2003, Mr. Aubry served as vice president of transformation for Textron, Inc., a $10 billion global multi-industry company with market leading brands and businesses serving the general aviation, aerospace and defense, industrial and commercial finance markets.

About Harbert

Harbert Distressed Investment Master Fund, Ltd. is focused on high-yield (special situation) and distressed securities on both the long and short sides, including debt and equity investments in turn-arounds, restructurings, liquidations, event driven situations and inter-capital structure arbitrage.

Source: Harbert Distressed Investment Master Fund, Ltd.

CONTACT: Matthew J. Ferko of Harbert Distressed Investment Master Fund,
Ltd., +1-212-521-6974

-------
Profile: intent