Contact: Charles Maier, (301) 929-1429 Kris Warner, (301) 570-2060

No Interruption in Business While Company Plans Possible Taxi Co-op

Kensington, MD (January 29, 2007) - Barwood, Inc., a prominent, long-time presence on the roadways of Montgomery County, announced today that it will seek to reorganize its transportation business by filing a voluntary petition for Chapter 11 reorganization. The company is taking the action to better cope with a tight labor market and increased government regulatory pressure. Those factors, coupled with recent high insurance claims, prompted Barwood to seek court approval to propose reorganizing as a taxi co-op, a business model proven successful in other cities.

"We can assure our customers that we will continue to provide high-quality transportation service to meet their daily needs," said Lee Barnes, CEO and president. "As a business, we are continuously seeking ways to improve our operations and ensure our success and this is the course that makes the most sense to us in today's environment."

Barwood filed the Chapter 11 petition today in the United States Bankruptcy Court for the District of Maryland in Greenbelt, Maryland. Company officials advised its drivers, employees and Montgomery County officials in advance of the filing. No jobs are expected to be lost under the reorganization, Barnes said. Barwood has more than 400 employees and drivers.

In letters to its customers, employees, drivers and vendors, Barwood described the reorganization process of a Chapter 11 and said that, with court approval, the company will maintain control of all its business operations, and operate as "business as usual." All debts will be paid over a specified period of time under the court's supervision. Barwood likened the situation to that of airlines that have sought reorganization through Chapter 11, but continue to operate.

Barwood's drivers now work essentially as independent contractors to Barwood. They pay a daily fee to rent a vehicle, utilize Barwood's computer dispatch service and make use of its maintenance facilities. Under the proposed co-op system, drivers will be able to purchase from Barwood one or more vehicles, the associated vehicle licenses, and operate within a co-op where they can benefit from the increasing value of their licenses, known as passenger vehicle licenses (PVLs). The co-op taxi model, which operates successfully in Chicago, San Francisco, Los Angeles and other cities, offers ownership opportunities to drivers, many of whom are recent immigrants.

Barwood Seeks to Reorganize Under Chapter 11, Company Assures Riding Public "It's Business as Usual" Page Two

Barwood said it is already working on securing third-party financing for any driver interested in investing in a PVL and joining a potential co-op. Barwood currently handles 4,000 trips a day, including transporting many seniors as well as persons with disabilities in special, handicapped accessible vans.

"A co-op would allow you to have a stake in a successful, long-term business for years to come," Barnes told drivers. "As owners of licenses and vehicles, you will realize value and you can have greater value if you continue to work hard to provide our customers with a courteous, safe ride in clean, well-maintained vehicles."

Barwood said that new government regulations now require greater scrutiny of prospective and veteran drivers, and have extended the waiting periods to get a license or renew one. The extended time periods have discouraged drivers, even veteran drivers, from waiting for licenses and forcing them to find jobs elsewhere that don't require prolonged waiting periods. Low unemployment in the Washington area compounds the recruitment of drivers. Barwood has more than 75 full and part-time openings for taxi drivers.

Other recent government regulations, which leave private limousine services untouched, include strict limits on the lengths of time that customers must wait for a taxi. Barwood scores well by such standards, in spite of the increasing traffic congestion in the county. Barwood is the only taxi company in Montgomery County that operates a full, computer-aided dispatch system and a global positioning system (GPS) to expedite and track its vehicles. Customers can also order taxis from the company's website.

Barwood, Inc., which began service in 1964, has a fleet of 400 vehicles, including 40 handicapped accessible vehicles. The company handles 4,000 trips a day. Barwood was named as the nation's top taxi transportation company in 1991. More recently, the U.S. Environmental Protection Agency saluted it for its efforts in helping to "reduce traffic and air pollution in the community." Barwood also operates alternative fuel taxis - it started with 15 in 1996 - the only taxi company in the Washington area to do so.

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