A negotiated settlement has been achieved concerning a Federal District Court lawsuit between McKenzie Bay International Ltd. and MTI Lighting Specialists/Energy Management Co. Effective immediately, McKenzie Bay welcomes five new Directors to the Board. They include Mark Cecil, Michael A. Pollakowski, Kevin B. Cook, Lawrence F. Leete, and Dilip K. Nigam. Also effective immediately, the Board accepts the resignation of two Directors, John Popp and John Sawarin, who have also resigned as Officers of the company and subsidiaries. Mr. Cook has been appointed as President, Mr. Pollakowski as CFO and Mr. Cecil will serve as Chairman of the Board of McKenzie Bay.

McKenzie Bay International Ltd., YA Global Investments L.P., and MTI Energy Management/Lighting Specialists Inc. entered into an escrow and settlement agreement on August 21, 2008. YA Global Investments L.P. has accepted an offer to pay off their outstanding debentures that include a partial cash payment, return of 14,367,426 McKenzie Bay pledge shares, replace 3,500,000 McKenzie Bay warrants, and cancel all other McKenzie Bay warrants. MTI has agreed to dismiss its Federal lawsuit towards McKenzie Bay; secure WindStor(R) technology rights for McKenzie Bay; and issue a 5% ownership interest in its affiliated power sales company, Clean Green Energy LLC to MKBY. As part of the settlement, affidavits and releases of current board members, prior board members, and prior employees have been executed, and current and prior board members have agreed to return certain MKBY shares.

McKenzie Bay International Ltd. announced on December 7, 2007, Mr. Westerholm was replaced by John Sawarin as the Chairman of MKBY's Board of Directors. On the same date Mr. Westerholm resigned as a director of MKBY.