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SIOUX FALLS, S.D., July 30 /PRNewswire-FirstCall/ -- NorthWestern Corporation d/b/a NorthWestern Energy ("NorthWestern") today announced that the U.S. Bankruptcy Court for the District of Delaware (the "Bankruptcy Court") has approved the company's motion allowing it to make, to the holders of former debt and allowed unsecured claims, a surplus distribution in cash, rather than Stock and Accruals (as defined below), from the disputed claims reserve (the "Creditors' Reserve") established under NorthWestern's confirmed Plan of Reorganization (the "Plan") from the Company's 2004 Chapter 11 reorganization. The Participating Creditors (defined below) will receive their pro rata share of the surplus distribution exclusively in cash unless they elect to receive their share of the surplus distribution in Stock and Accruals. The election to receive Stock and Accruals, rather than cash, must be made by August 22, 2008. Those Participating Creditors who do not timely make the election will receive their share of the surplus distribution in cash rather than Stock and Accruals. This distribution will fully distribute all shares and associated dividends and interest from the Creditors Reserve.

The Creditors' Reserve holds 2,362,618 shares of NorthWestern's common stock (the "New Common Stock"), which is listed on the New York Stock Exchange under the ticker symbol "NWE", plus cash dividends and interest in respect of such shares (the "Stock and Accruals").

The Bankruptcy Court authorized NorthWestern to repurchase shares of New Common Stock from the Creditors' Reserve which will allow the Creditors' Reserve to make the surplus distribution in cash. NorthWestern contemplates that the surplus distribution will be made in late August or September 2008.

The surplus distribution will be made to unsecured creditors and debt holders in Class 7 and Class 9 under the Plan (the "Participating Creditors") except that the holders of quarterly income preferred securities will not receive any recovery under the surplus distribution but instead will receive their distribution from a separate fund under a "Global Settlement" approved by Order of the Bankruptcy Court, dated July 14, 2008.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements often address our expected future business and financial performance, and often contain words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," or "will." These statements are based upon our current expectations and speak only as of the date hereof. Our actual future business and financial performance may differ materially and adversely from those expressed in any forward-looking statements as a result of various factors and uncertainties, including, but not limited to:

-- potential additional adverse federal, state, or local legislation or regulation or adverse determinations by regulators could have a material adverse effect on our liquidity, results of operations and financial condition;

-- unanticipated changes in availability of trade credit, usage, commodity prices, fuel supply costs or availability due to higher demand, shortages, weather conditions, transportation problems or other developments;

-- unscheduled generation outages or forced reductions in output, maintenance or repairs; and

-- adverse changes in general economic and competitive conditions in our service territories,

Our Annual Report on Form 10-K, recent and forthcoming Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K and other Securities and Exchange Commission filings discuss some of the important risk factors that may affect our business, results of operations and financial condition.

We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.