Handleman Company Files a Preliminary Proxy Statement in Connection With Proposed Plan of Final Liquidation and Dissolution of the Company

Handleman Company Files a Preliminary Proxy Statement in Connection With Proposed Plan of Final Liquidation and Dissolution of the Company

TROY, Mich., Aug. 15 /PRNewswire-FirstCall/ -- Handleman Company (Pink Sheets: HDLM), www.handleman.com , filed a preliminary proxy statement on August 15, 2008 with the Securities and Exchange Commission ("SEC") in connection with its proposed Plan of Final Liquidation and Dissolution of the Company. The Plan of Liquidation must be approved by a majority of the Company's shareholders in order to be implemented.

As previously announced, Handleman will consider a distribution to the Company's shareholders of cash proceeds generated from the asset dispositions in excess of what is needed to satisfy the Company's obligations. Whether there will be any excess cash proceeds for distribution to shareholders is subject to a number of material risks and uncertainties that may prevent any such distribution from occurring. Accordingly, while the Company believes that a cash distribution is a possibility, actual results may differ from current estimates, perhaps materially. The Company will provide information about future cash distributions, if any, at such time as it believes that they are reasonably estimable.

Additional Information and Where to Find It

In connection with the proposed Plan of Liquidation, Handleman Company will file a proxy statement with the Securities and Exchange Commission ("SEC"). SHAREHOLDERS ARE URGED TO READ THE PROXY STATEMENT FILED WITH THE SEC CAREFULLY AND IN ITS ENTIRETY WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED PLAN OF LIQUIDATION. The definitive proxy statement will be mailed to the Company's shareholders. In addition, shareholders will be able to obtain the proxy statement and all other relevant documents filed by the Company with the SEC free of charge at the SEC's Web site www.sec.gov or from Handleman Company, Attn: Corporate Secretary, 500 Kirts Blvd., Troy, Michigan 48084, 248-362-4400.

Participants in the Solicitation

Handleman Company's directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from the shareholders of the Company in favor of the Plan of Liquidation. INFORMATION ABOUT HANDLEMAN COMPANY AND ITS DIRECTORS AND EXECUTIVE OFFICERS, AND THEIR OWNERSHIP OF THE COMPANY'S SECURITIES AND INTERESTS IN THE PLAN OF LIQUIDATION, WILL BE SET FORTH IN THE AFOREMENTIONED PROXY STATEMENT. Additional information regarding the interests of those persons may be obtained by reading the proxy statement when it becomes available.

Forward-Looking and Cautionary Statements

This press release contains forward-looking statements, which are not historical facts. These statements involve risks and uncertainties and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results, events and performance could differ materially from those contemplated by these forward-looking statements because of factors affecting any of a number of critical objectives, including, without limitation, obtaining all required regulatory approvals to sell the assets and operations of our Canadian subsidiary to Anderson, the completion of an agreement to sell a substantial portion of the Company's UK assets to TESCO, our ability to transition our U.S. music customers other than Wal-Mart to other vendors smoothly, maintaining satisfactory working relationships with our lenders, customers and vendors, maintaining sufficient liquidity to fund our day-to-day operations, retaining key personnel, satisfactory resolution of any outstanding claims or claims which may arise, finding and capitalizing on opportunities to maximize the value of the Company's non-music operations, selling certain of the Company's assets in a timely manner and for amounts reasonably consistent with the Company's valuation of those assets, and other factors discussed in this press release and those detailed from time to time in the Company's filings with the Securities and Exchange Commission. Handleman Company notes that the preceding conditions are not a complete list of risks and uncertainties. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date of this press release.

First Call Analyst:
FCMN Contact:

Source: Handleman Company

CONTACT: Rozanne Kokko, Senior Vice President and CFO, +1-248-362-4400,
Ext. 3998, or Greg Mize, Vice President, Investor Relations and Treasurer,
+1-248-362-4400, Ext. 211, both of Handleman Company

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

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