CCPCN Capital Crossing Preferred (MM)

NEW YORK, April 22 /PRNewswire-FirstCall/ -- Capital Crossing Preferred Corporation (NASDAQ:CCPCN) (the "Company") announced today that the audit report of its independent registered public accounting firm, Ernst & Young, included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2008 (the "Form 10-K"), while expressing an unqualified opinion regarding the Company's audited financial statements, contained a note from Ernst & Young that identified matters which raise substantial doubt about the Company's ability to continue as a going concern. This announcement is being made in compliance with Nasdaq Marketplace Rule 5250(b)(2), which requires separate disclosure of an audit opinion that contains a going concern qualification. This announcement does not represent any changes or amendment to the Company's 2008 financial statements or to the Form 10-K which was filed with the Securities and Exchange Commission on April 15, 2009. As disclosed in the Form 10-K, at December 31, 2008, the Company had total assets of approximately $96 million, including cash and cash equivalents of approximately $43.8 million, and total liabilities of less than approximately $0.9 million. However, as disclosed in the Form 10-K, on September 15, 2008, Lehman Brothers Holdings Inc. ("Lehman Brothers"), parent company of Lehman Brothers Bank, FSB ("Lehman Bank") and the ultimate parent company of the Company, filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code. Further, Lehman Bank, the owner of all of the common stock of the Company, is subject to a Cease and Desist Order, dated January 26, 2009, and a Prompt Corrective Action Directive, dated February 4, 2009, issued by the Office of Thrift Supervision (the "OTS"), requiring Lehman Bank, among other matters, to submit a capital restoration plan and a liquidity management plan, and imposing restrictions on certain activities of Lehman Bank and the Company. Ernst & Young therefore noted in its audit report included in the From 10-K that the bankruptcy of Lehman Brothers and the ability of the OTS to regulate and restrict the business and operations of the Company, in light of the Cease and Desist Order and the Prompt Corrective Action Directive, raise substantial doubt about the Company's ability to continue as a going concern. About Capital Crossing Preferred Corporation. Capital Crossing Preferred Corporation acquires and holds real estate assets consisting primarily of mortgage assets secured by commercial and multi-family properties. Lehman Bank is the sole holder of the Company's common stock. The Company's 8.50% Non-Cumulative Exchangeable Preferred Stock, Series D (the "Series D Preferred Stock"), is listed on The NASDAQ Stock Market under the symbol "CCPCN". Forward-Looking Statements This press release may contain certain statements that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "expects," "anticipates," "believes," "estimates" and other similar expressions or future or conditional verbs such as "will," "should," "would" and "could" are intended to identify such forward-looking statements. These statements are not historical facts, but instead represent the Company's current expectations, plans or forecasts of its future results, growth opportunities, business outlook, loan growth, credit losses, liquidity position and other similar matters, including, but not limited to, the ability to pay dividends with respect to the Series D Preferred Stock, the consummation of the pending asset exchange, future bank regulatory actions that may impact the Company and the effect of the bankruptcy of Lehman Brothers on the Company. These statements are not guarantees of future results or performance and involve certain risks, uncertainties and assumptions that are difficult to predict and often are beyond the Company's control. Actual outcomes and results may differ materially from those expressed in, or implied by, the Company's forward-looking statements. You should not place undue reliance on any forward-looking statement and should consider all uncertainties and risks, including, among other things, the risks set forth under Item 1A. "Risk Factors" in the Form 10-K, as well as those discussed in any of the Company's other subsequent Securities and Exchange Commission filings. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update any forward-looking statement to reflect the impact of circumstances or events that arise after the date the forward-looking statement was made. Possible events or factors could cause results or performance to differ materially from what is expressed in the Company's forward-looking statements. Those possible events or factors include, but are not limited to, those risk factors discussed under Item 1A. "Risk Factors" in the Form 10-K, and the following: limitations by regulatory authorities on the Company's ability to implement its business plan and restrictions on its ability to pay dividends; further regulatory limitations on the business of Lehman Bank that are applicable to the Company; a decline, or a perceived decline, in Lehman Bank's capital situation that could result in the Series D Preferred Stock being subject to an automatic exchange into preferred shares of Lehman Bank; a decline in Lehman Bank's capital ratios below certain specified levels that could force Lehman Bank to merge with or be acquired by another entity or begin voluntary dissolution; failure of the Series D Preferred Stock to remain listed on The NASDAQ Stock Market or to otherwise continue to trade on The NASDAQ Stock Market; failure of the Series D Preferred Stock to otherwise retain value and/or liquidity; the risk that the Company may not have adequate cash available to continue to pay dividends with respect to the Series D Preferred Stock; consummation of the pending asset exchange may result in the Company owning a portfolio of residential mortgage loans that do not perform as well as its current portfolio; negative economic conditions that adversely affect the general economy, housing prices, the job market, consumer confidence and spending habits which may affect, among other things, the credit quality of the Company's loan portfolios (the degree of the impact of which is dependent upon the duration and severity of these conditions); the level and volatility of interest rates; changes in consumer, investor and counterparty confidence in, and the related impact on, financial markets and institutions; legislative and regulatory actions which may adversely affect the Company's business and economic conditions as a whole; the impact of litigation and regulatory investigations; various monetary and fiscal policies and regulations; changes in accounting standards, rules and interpretations and the impact on the Company's financial statements; and changes in the nature and quality of the types of loans held by the Company. DATASOURCE: Capital Crossing Preferred Corporation CONTACT: Deborah Munies, +1-973-261-1961

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