Sino-Forest Corporation Receives Notice of Default and Forms Special Restructuring Committee

Sino-Forest Corporation

today announced that it has received written notices of default dated December 16, 2011 in respect of its Senior Notes due 2014 and its Senior Notes due 2017. The notices, which were sent by the Trustee under the Senior Note Indentures, reference the Company's previously disclosed failure to release its 2011 third quarter financial results (the "Q3 Results") on a timely basis. An "Event of Default" under the Senior Note Indentures will have occurred if the Company fails to cure or otherwise fails to address the breach of indenture giving rise to the notices of default within 30 days following receipt of the notices. The Company does not expect to be able to file the Q3 Results and cure the default within the 30 day cure period. The Company and its advisors met on December 14, 2011 with an ad hoc committee of note holders and their legal counsel. The Company was informed by the ad hoc committee's legal counsel that the note holders attending and others represented at the meeting by legal counsel hold a substantial portion of the Company's four series of senior and convertible notes. As there is no registry of beneficial holders for the notes, the Company cannot independently verify the holdings of those who attended or were represented by counsel. The note holders and their legal counsel expressed a willingness to work cooperatively with the Company in an effort to preserve value for the benefit of the Company's stakeholders. The Company has since been informed that the note holders present at the meeting or represented by counsel did not initiate or support the issuance of the notices of default that the Company has received from the Trustee.