PSC Files for Protection in Canada

Philip Services Corp. announced that it and certain of its subsidiaries, including its two Canadian operating subsidiaries, Philip Services Inc. and Philip Analytical Services Inc., have filed voluntary applications for protection under the Companies' Creditors Arrangement Act with the Ontario Superior Court of Justice.

The purpose of the Canadian filing is to assist the company in carrying out the reorganization plan sponsored by High River Limited Partnership, an affiliate of Carl C. Icahn, which was selected by the company and which selection was affirmed by the U.S. Bankruptcy Court by order made on Sept. 12, 2003. Under the Canadian filing, the Canadian Court has recognized the U.S. Bankruptcy Proceedings, stayed all claims by Canadian claimants against the company and its subsidiaries subject to the Chapter 11 proceedings under the U.S. Bankruptcy Code, and directed all Canadian claimants with claims against the US debtors to assert such claims in the US proceedings. The recognition of the US proceedings by the Canadian Court will facilitate the effective coordination of the Company's restructuring in both countries.

Ernst & Young Inc. has been appointed as interim receiver over the key business assets of the company's Canadian subsidiaries to facilitate the Canadian transactions required by the High River Plan. Under the High River Plan, High River Limited Partnership, among other things, will provide an exit loan facility of $150 million to the reorganized company and will pay $20 million for a 20 percent equity interest in the reorganized company on the effective date of a plan of reorganization.