FOR IMMEDIATE RELEASE

Contact: Joseph Koenig, Treasurer
(800)225-0135 • (214)528-5588

THE HALLWOOD GROUP INCORPORATED CLARIFIES ANNOUNCEMENT OF HALLWOOD ENERGY L.P. BANKRUPTCY

Dallas, Texas, March 2, 2009 – The Hallwood Group Incorporated
(NYSE Alternext US-HWG) issued a clarification of its announcement that Hallwood Energy, L.P. and certain of its affiliates filed petitions for relief under Chapter 11 of the United States Bankruptcy Code.

Hallwood Group stated that the bankruptcy filing was only by Hallwood Energy, the general partner of Hallwood Energy and Hallwood Energy’s subsidiaries. The bankruptcy filing does not include Hallwood Group or any other of Hallwood Group’s assets. Hallwood Group continues to own Brookwood Companies Incorporated, which continues to operate in the normal course of business.