BENSALEM, Pa., May 19 — Orleans Homebuilders, Inc. (the “Company”, or “Orleans”) (Pink Sheets: OHBIQ), which develops, builds and markets high-quality single-family homes and townhouses and whose operations in Pennsylvania and New Jersey date back more than 90 years, announced today that its recent discussions with its senior lending group have resulted in an agreement to pursue negotiation of a plan of reorganization with the support of the Company’s senior lending group. As a result, the Company has terminated the previously announced Asset Purchase Agreement with NVR, Inc. Additionally, the Company has cancelled the hearing scheduled for May 21, 2010 in the United States Bankruptcy Court (the “Court”) for the District of Delaware on its motion for, among other things, establishment of bidding procedures with respect to the purchase of substantially all of the assets of the Company.

Orleans currently anticipates that it will file a plan of reorganization with the Court in late summer and would hope to emerge from bankruptcy in late fall. The Company emphasizes that there can be no assurances as to the timing, contents or the outcome of any plan of reorganization or the Company’s potential emergence from bankruptcy.

Mitchell B. Arden, a Managing Director and Shareholder of Phoenix Management who has been serving as Orleans’ Chief Restructuring Officer since March 4, 2010, stated: “Over the past several weeks, the Company has been in active dialogue with a number of parties regarding its strategic options. It is clear from these discussions that pursuing a plan of reorganization appears to be the best course of action for the Company and its constituents. As part of this process, and before we prepare and file the Company’s plan, we believe that we will be able to restart homebuilding even for those units under contract on which construction has not yet begun. At the same time, we should be able to reinitiate sales and marketing efforts on new homes. This is a significant step forward for our many customers and contractors who have been waiting patiently for the Company to move in this direction. We hope to have the necessary financial support to undertake these new construction and sales efforts in a few weeks.

“The option to pursue a plan of reorganization means that the Orleans name and its operations may be preserved for the benefit of our people and the communities in which we work. We appreciate the on-going support of our lenders, employees, customers, vendors and contractors. Their collective willingness to work with us during this critical time has provided us with the opportunity to pursue a plan that better suits the needs and interests of all parties. The details of the reorganization will be developed as we continue to work with our creditors. On a personal note, I wish to express my gratitude to the Company’s bankruptcy counsel, Cahill Gordon & Reindel LLP, as well as corporate counsel from Blank Rome LLP, all of whom have worked tirelessly to help us define this renewed direction for Orleans.”

The Company and most of its operating subsidiaries filed voluntary petitions to commence the Chapter 11 process on March 1, 2010. The filing does not include certain of the Company’s subsidiaries, including its mortgage services subsidiary, Alambry Funding Inc., which provides mortgage brokerage services for customers and financial institutions but which does not underwrite any customer mortgages. All of the debtors in the Chapter 11 proceedings are borrowers under the Debtor-in Possession Loan Agreement entered into on April 21, 2010 (the “DIP Loan Agreement”). As security for the DIP Loan Agreement, the borrowers provided the lenders a security interest in all of their assets, with a few minor exceptions. The debtors’ execution and delivery of the DIP Loan Agreement was approved by the Bankruptcy Court on April 16, 2010.

The Company is providing information about the reorganization at www.orleanshomesreorg.com.