Item 7.01 Regulation FD Disclosure.

By a press release issued on March 2, 2009, The Hallwood Group Incorporated (the "Company") reported that on March 1, 2009, Hallwood Energy, L.P. and certain of its affiliates, in which the Company is an investor, filed petitions for relief under Chapter 11 of the United States Bankruptcy Code. The cases are pending in the United States Bankruptcy Court for the Northern District of Texas, Dallas Division, in In re Hallwood Energy, L.P., et al., Case No. 09-31253. The Company recognized losses associated with the investment through the equity method of accounting and had reduced the carrying value of its investment in Hallwood Energy L.P. to zero at December 31, 2007. Additional losses were recorded in 2008 to the extent of further investments in Hallwood Energy L.P. and the carrying value of the Company's investment remained at zero as of September 30, 2008. Reference is made to the press release filed as Exhibit 99.1 hereto. The information set forth in Exhibit 99.1 is hereby incorporated by reference herein.
By filing this Current Report on Form 10-K, the registrant does not acknowledge that disclosure of this information is required by Regulation FD or that the information was material or non-public before the disclosure. The registrant assumes no obligation to update or supplement forward-looking statements in this statement that become untrue because of new information, subsequent events or otherwise.

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