Overhill Farms, Inc.: Overhill Farms, Inc. Comments on Protest Activity

LOS ANGELES, CA--(Marketwire - June 12, 2009) - Overhill Farms, Inc. (NYSE Amex: [ OFI ]) today released the following letter to its customers and shareholders regarding protest activity by former employees.

You may have seen reports in the press or online concerning recent events at Overhill Farms. The purpose of this letter is to report what actually occurred, and to correct any misconceptions.

Earlier this year, as a result of a scheduled Internal Revenue Service audit of Overhill Farms, we were informed that the Social Security Numbers for approximately 260 of our 1,000-plus current employees were invalid.

We asked these employees to correct any errors within 60 days. Overhill management offered to meet with any employee to provide assistance. Only 17 responded, and all of these acknowledged that they had furnished false information to the company.

After consulting with legal counsel, the company determined that it had no option other than to terminate the employees who had provided false social security numbers. Section 7202 of the IRS Code makes it a crime for a company to knowingly provide false or inaccurate payroll tax information -- including Social Security numbers -- to the IRS. The Code also says employees who knowingly provide false information to the IRS or make false statements (for example, when signing a Form W4) are subject to criminal prosecution, as are those who abet them.

On May 31, 2009, the company terminated these 260 employees for providing the company with fraudulent information, for failing to provide a valid Social Security number, and failing to respond to the company's request for correction. Their continued employment under these circumstances would have subjected both the company and these employees to significant criminal and civil penalties.

The company's production has not been affected by these personnel changes. The line workers have been replaced from a pool of part-time workers, who were previously trained in our operations, and who have the passed E-Verify screening. We have taken additional measures to ensure the uninterrupted flow of our quality products.

Prior to the terminations, we met with representatives of United Food Workers Local 770, the union that represents a large majority of our employees. We also met with elected officials and other advocates for the affected employees. None of these parties, then or now, have claimed that the documents provided by these employees were legitimate. Nor have they proposed any way that the company could lawfully retain those employees.

Several protests have been held at the company's headquarters, and at a retail location of one of our customers. At the protests, in pamphlets, and on several blogs, protest leaders have asserted that the terminations were motivated by racial and gender bias. These claims are false. The statements are based solely on the fact that most of the terminated employees were Hispanic and female. The protesters ignore the fact that a majority of our work force is Hispanic and female, and that the majority of the replacement workers are Hispanic and female.

We believe the protests and false accusations are calculated solely to coerce the company to ignore the law, which of course we cannot and will not do. Acceding to these demands would harm the company, its shareholders, our business partners and our remaining employees.

This has been an emotional situation for the affected employees and their families, for whom we have compassion, and for the company. But we will act vigorously to defend our company's reputation as an honorable employer and its capability to perform as a trustworthy supplier to our customers.

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