Paragon's Disclosure Statement Approved; January 2000 / Confirmation Hearing Date Set; Shareholder Meeting Adjourned

Norcross, Ga. (PROTEXT) - Paragon Trade Brands, Inc. (OTCBulletin Board: PGNFQ) today announced that the United StatesBankruptcy Court for the Northern District of Georgia hasapproved the Company's Disclosure Statement (the "DisclosureStatement") in connection with the Second Amended Plan (the"Amended Plan") of Reorganization filed by the Company and itsOfficial Committee of Unsecured Creditors (the "Creditors'Committee") as co-proponents. In connection therewith, the Courtalso approved certain voting procedures and established Friday,January 7, 2000 as the voting deadline for the Amended Plan andThursday, January 13, 2000 as the date for a hearing to considerconfirmation of the Amended Plan. Commenting on the Amended Plan and approval of the DisclosureStatement, Bobby Abraham, Chief Executive Officer of Paragon,stated, "We are delighted to have received Bankruptcy Courtapproval of our Disclosure Statement and are pleased to be onschedule for a confirmation hearing on our plan of reorganizationfor mid-January. We are also very pleased to have the support ofthe Creditors' and Equity Committees with respect to the plan.One of our major goals has been to achieve a consensual plan ofreorganization and with the support of the Equity Committee wehave now achieved that goal." Mr. Abraham further noted, "The approval of the DisclosureStatement together with the execution of the Wellspring StockPurchase Agreement are major milestones in our progress towardemergence from Chapter 11. We now look forward to moving aheadwith completing the transaction with Wellspring and exitingChapter 11 as expeditiously as possible." The Amended Plan incorporates certain modifications withrespect to the acquisition of Paragon by Wellspring CapitalManagement LLC ("Wellspring") as part of the plan ofreorganization (the "Wellspring Transaction"). The Amended Planalso reflects the terms of a global settlement reached betweenthe Company, the Creditors' Committee, the Official Committee ofEquity Security Holders (the "Equity Committee"), The Procter &Gamble Company ("P&G") and Kimberly-Clark Corporation ("K-C")with respect to certain distributions to be made to the Company'scurrent stockholders under the Amended Plan. The Equity Committeesupported approval of the Disclosure Statement and urges theCompany's stockholders to vote to accept the Amended Plan. Paragon also announced that it has executed a stock purchaseagreement with Wellspring (the "Wellspring Stock PurchaseAgreement") incorporating the modifications included in theAmended Plan. Under the Amended Plan, Paragon will be reorganizedeither (a) through the consummation of the Wellspring Transactionand the distribution of the proceeds as outlined under theAmended Plan, or (b) alternatively, if the Wellspring Transactionis not consummated, pursuant to a stand-alone plan ofreorganization. Under the Wellspring Transaction, Wellspring will purchase98.5% (subject to reduction with respect to any New Common Stockpurchased in accordance with the Wellspring Rights Offering) ofthe New Common Stock to be issued and outstanding on theeffective date of the Amended Plan for a purchase price equal to$10.00 per share of New Common Stock, or approximately $117million in cash. Holders of allowed unsecured claims will receivedistributions in amounts equal to their pro rata share of the$117 million of cash and approximately $160 million (subject toadjustment) of 11.25% five-year senior subordinated notes (the"New Notes") and the right to participate in a rights offering(the "Wellspring Rights Offering") to purchase up to 35% of thenew common stock (the "New Common Stock") of the reorganizedentity ("Reorganized Paragon"). The Company's currentstockholders will receive their pro rata share of 1.5% of the NewCommon Stock, certain warrants to purchase 5% of the New CommonStock (the "Warrants") and the right to participate in theWellspring Rights Offering (to the extent all such rights are notexercised by holders of allowed unsecured claims). If Paragon is reorganized on a stand-alone basis as permittedunder the Amended Plan, holders of allowed unsecured claims willreceive distributions in amounts equal to their pro rata share of99.13% of the New Common Stock and the Company's currentstockholders will receive their pro rata share of .87% of the NewCommon Stock Amount and the Warrants. Under either the Wellspring Transaction or a stand-alone plan,holders of allowed unsecured claims and the Company's currentstockholders also will receive a portion of the proceeds, if any,of certain claims which will remain with the estate to be pursuedby a Litigation Claims Representative to be approved inaccordance with the terms of the Amended Plan. In response to a joint written request of the Creditors' andEquity Committees, Paragon's Board of Directors has voted toadjourn the 1999 Annual Stockholders Meeting scheduled forNovember 29, 1999 until such time as the Bankruptcy Court has hadan opportunity to consider confirmation of the Amended Plan, orany amendment thereto, and, assuming confirmation, consummationof the transactions contemplated therein. Paragon Trade Brands is the leading manufacturer of storebrand infant disposable diapers in the United States and, throughits wholly owned subsidiary, Paragon Trade Brands (Canada) Inc.,is the leading marketer of store brand infant disposable diapersin Canada. Paragon manufactures a line of premium and economydiapers, training pants, feminine care and adult incontinenceproducts, which are distributed throughout the United States andCanada, primarily through grocery and food stores, massmerchandisers, warehouse clubs, toy stores and drug stores thatmarket the products under their own store brand names. Paragonhas also established international joint ventures in Mexico,Argentina, Brazil and China for the sale of infant disposablediapers and other absorbent personal care products. Statements made in this press release, other than thoseconcerning historical information, should be considered forward-looking statements. Such statements are subject to certain risksand uncertainties that could cause actual results to differmaterially from those expressed in the Company's forward-lookingstatements. Factors which could affect the Company's financialresults, including, but not limited to: the Company's Chapter 11filing; increased raw material prices and product costs; newproduct and packaging introductions by competitors; increasedprice and promotion pressure from competitors; new competitors inthe market; Year 2000 compliance issues; and patent litigation,are described in the Company's Annual Report on Form 10-K filedwith the Securities and Exchange Commission. Readers arecautioned not to place undue reliance on the forward-lookingstatements contained herein, which speak only as of the datehereof, and which are made by management pursuant to the "safeharbor" provisions of the Private Securities Litigation ReformAct 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 ParagonTrade Brands, Inc., 678-969-5200, or Kurt P. Ross or Guy B.Lawrence of K.P. ROSS, INC., 212-308-3333, or kpross1@msn.com ,both for Paragon Trade Brands, Inc.

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