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Press release from CNW Group

The Brick Group Income Fund Announces Plan to Convert to a Corporate Structure

Monday, November 01, 2010

The Brick Group Income Fund Announces Plan to Convert to a Corporate Structure08:30 EDT Monday, November 01, 2010/NOT FOR DISTRIBUTION THROUGH U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE U.S./EDMONTON, Nov. 1, 2010 /CNW/ - (TSX Symbol: BRK.UN): The Brick Group Income Fund (the "Fund") today announced its plans to seek Unitholder approval to convert from an income trust into a corporate structure effective on or about December 31, 2010 (the "Conversion"). Reorganization of the Fund is being initiated as a result of the Federal Government's announcement on October 31, 2006 that changes the manner in which income trusts, such as the Fund, will be taxed effective 2011.The Unitholders of the Fund will be asked to approve a plan of arrangement (the "Arrangement") to implement the conversion at a special meeting (the "Meeting") of Unitholders to be held on December 6, 2010.The Federal Government's announcement on October 31, 2006 of the pending imposition of a tax on income trusts effective 2011 caused the Fund to analyze options which would maximize Unitholder value for the long term. The conclusion of the analysis was that conversion to a corporation was the optimal option available to the Fund. The Fund's Board of Trustees and management believe that the proposed reorganization offers a number of benefits: << - The Arrangement provides for an effective and efficient method of converting the Fund from an income trust to a corporation consistent with existing legislation. - Provides a simplified tax structure that is more comparable to public companies operating in Canada and internationally. - As a corporation, The Brick should have greater access to capital markets as the business continues to grow. - The Arrangement increases the potential to attract new investors thereby improving the liquidity of the Fund's securities. >>No distributions have been declared or paid subsequent to February 15, 2009. The Fund does not anticipate that any further distributions will be paid while it remains an income fund and, at this time, does not anticipate any payment of dividends after conversion to a corporation.Approval ProcessManagement anticipates that the details of the proposed Arrangement will be provided to unitholders of the Fund with the meeting materials which are expected to be mailed by November 9, 2010. Pursuant to the Arrangement, it is proposed that units of the Fund held by unitholders will be transferred to a corporation ("New Brick") in consideration for common shares on the basis of one common share for each unit transferred. It is expected that the reorganization will be completed on a tax-free rollover basis, subject to filing any required tax elections. Upon completion of the Arrangement, each outstanding warrant will be exercisable for one common share of New Brick. New Brick will assume the Fund's obligations under the 12% senior secured debentures issued pursuant to the May 28, 2009 indenture.The Arrangement is subject to the approval of the Fund's unitholders by not less than two-thirds of the votes cast, voting in person or by proxy at the special meeting of Unitholders scheduled to be held on December 6, 2010. The Arrangement will also be subject to Court approval, stock exchange approval and other necessary approvals. The Toronto Stock Exchange (the "TSX") has conditionally approved the substitutional listing of the common shares of New Brick, subject to New Brick fulfilling the requirements of the TSX. The common shares will be listed on the TSX under the trading symbol "BRK"."This proposed reorganization is one more major step in addition to the progress we have made over the last number of quarters that have put The Brick on a solid financial foundation," said Bill Gregson, President and Chief Executive Officer of the Fund. "We have advised our Unitholders of our intention to convert to a corporate structure for several quarters. We are now ready to seek Unitholder approval to proceed with the conversion," added Mr. Gregson.The FundThe Brick Group, together with its subsidiaries, is one of Canada's largest volume retailers of household furniture, mattresses, appliances and home electronics, operating under five principal banners: The Brick, United Furniture Warehouse, The Brick Superstore, The Brick Mattress Store and Urban Brick. In addition, through its corporate sales division, The Brick Group services the subdivision, condominium, and high-rise builder market. The Brick Group's retail operations are located in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Prince Edward Island, Nova Scotia, New Brunswick and the Yukon Territory.Tax ImplicationsComments on the tax implications of the conversion are provided as general information only. They are not intended to be legal or tax advice to any particular Unitholder. All Unitholders should consult legal, business and tax advisors about the tax implications of the conversion.Forward-looking StatementsCertain information in this news release contains forward-looking statements including management's assessment of future plans and operations of the Fund, the effect and anticipated benefits of the Conversion and the timing of the completion of the Conversion. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the Fund's control including, without limitation, the impact of general economic conditions, industry conditions, fluctuation of commodity prices, fluctuation of exchange rates, environmental risks, industry competition, availability of qualified personnel and management, stock market volatility, timely and cost effective access to sufficient capital from internal and external sources. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect The Brick's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com) and at The Brick's website (www.brickgroup.ca). Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and The Brick does not undertake any obligation to update publicly or to revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.Additional information about the Fund is available on SEDAR (www.sedar.com) or the Fund's website at www.brickgroup.caFor further information: Bill Gregson, President and Chief Executive Officer of the Fund at (780) 930-6300