Paragon to File Motion Regarding Proposed $100 Million

Paragon Trade Brands, Inc. (NYSE: PTB) announced that it will file today a motion with the United States Bankruptcy Court for the Northern District of Georgia, seeking approval of bidding procedures, an expense reimbursement and a termination fee relating to a proposed investment by Wellspring Capital Management LLC, to acquire Paragon as part of a plan of reorganization (the "Wellspring Proposal"). The bidding procedures provide for the consideration of competing investment proposals from other interested parties. The Wellspring Proposal provides for a $100 million equity investment in Paragon by Wellspring in return for 84.1% of the new common stock of Paragon to be issued pursuant to a plan of reorganization, subject to dilution and diminution as a result of a rights offering for up to 24.1% of new common stock. The Wellspring Proposal also provides for reorganized Paragon's issuance of approximately $200 million in senior subordinated notes and Wellspring obtaining new third-party working capital financing for reorganized Paragon in the amount of at least $50 million. Under the Wellspring Proposal, it is estimated that there will be approximately $325 million in distributable value in the form of cash, notes and 15.9% of new common stock in Paragon as reorganized. As of March 28, 1999, liabilities subject to compromise totaled an estimated $407 million. The Wellspring Proposal contemplates that substantially all of Paragon's current senior management will continue with the company, and is subject to the completion of satisfactory due diligence, procurement of the working capital financing commitment, definitive documentation, Bankruptcy Court approval of the motion and the plan of reorganization and other conditions precedent standard in a transaction of this nature. The motion notes that the Wellspring Proposal is at this time a suggested format for a chapter11 plan of reorganization that would incorporate the Wellspring investment but that the distribution provisions of such a plan remain subject to negotiation. The Wellspring Proposal provides that Paragon may simultaneously prepare and file a stand-alone plan of reorganization so that the plan process and Paragon's emergence from chapter 11 are not delayed in the event that the Wellspring Proposal is not consummated, or a higher or otherwise better alternative transaction is not approved or accepted. Paragon and Wellspring hope and expect that the bid procedures, combined with active efforts to obtain higher and better third-party offers, will lead to prompt negotiations among parties in interest and the confirmation of a plan supported by most or all of such parties. Paragon's Creditors' Committee has indicated that it supports the Bid Procedures but has not yet indicated its support of the Wellspring Proposal. Paragon intends to discuss the Wellspring Proposal and the Bid Procedures with Paragon's Equity Committee, The Procter & Gamble Company and Kimberly-Clark Corporation over the next few weeks. Commenting on the Wellspring Proposal, Bobby Abraham, Chief Executive Officer of Paragon, stated, "Paragon has been working diligently to develop a stand-alone plan. Nevertheless, we believe the infusion of new capital through the Wellspring transaction constitutes a viable and prudent alternative to a stand-alone plan and the bidding procedures for which we are seeking approval have been designed to maximize recoveries on behalf of Paragon's stakeholders. Paragon has the ability to pursue an alternative transaction should it determine that such an alternative expedites its emergence from chapter 11 or maximizes its distributable value in its chapter 11 case. If it decides to pursue an alternative, Paragon's only obligation to Wellspring, should the Wellspring proposal become firm and unconditional, is the payment of reasonable expenses and a termination fee of $2 million." Wellspring Capital Management LLC manages a private investment partnership focused on investing in companies where it can create substantial value by contributing management expertise, innovative operating and financial strategies and capital. The partnership's capital is provided by investors who are among the largest and most respected public and private pension funds, corporations and financial institutions in the U.S. and Canada, as well as from the principals of Wellspring. Paragon Trade Brands is the leading manufacturer of store brand infant disposable diapers in the United States and Canada. Paragon manufactures a line of premium and economy diapers, training pants, feminine care and adult incontinence products, which are distributed throughout the United States and Canada, primarily through grocery and food stores, mass merchandisers, warehouse clubs, toy stores and drug stores that market the products under their own store brand names. Paragon has also established international joint ventures in Mexico, Argentina, Brazil and China for the sale of infant disposable diapers and other absorbent personal care products. Statements made in this press release, other than those concerning historical information, should be considered forward- looking statements. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed in the Company's forward-looking statements. Factors which could affect the Company's financial results, including, but not limited to: the Company's Chapter 11 filing; increased raw material prices and product costs; new product and packaging introductions by competitors; increased price and promotion pressure from competitors; new competitors in the market; Year 2000 compliance issues; and patent litigation, are described in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on the forward-looking statements contained herein, which speak only as of the date hereof, and which are made by management pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. ots Original Text Service: Paragon Trade Brands, Inc. Internet: http://www.newsaktuell.de Contact: Alan J. Cyron Executive Vice President and Chief Financial Officer of Paragon Trade Brands Inc. (USA) 678-969-5200, or Kurt P. Ross or Guy B. Lawrence (USA) 212-308-3333, or kpross1@msn.com, both of K.P. Ross, Inc. for Paragon Trade Brands, Inc.

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