<b>Battling Bankruptcy, Crown Paper Sells Assets</B>

Despite efforts to turn the company around after its 1995 spin-off, Crown Paper Co., Cincinnati, Ohio, is selling its assets, valued at $375.9 million in cash, to Crown Acquisition Corporation (CAC) in an effort to create new capital and emerge from bankruptcy.

The sale of assets, which will occur under section 363 of the bankruptcy code, also includes an assumption by the Purchaser of about $39 million of industrial development bonds.

"Notwithstanding the highly leveraged situation that the company has operated in since the spin-off in 1995, and the cyclical nature of our business, we have worked hard to turn the company around," says Bob Olah, CEO of Crown Vantage and Crown Paper. "While we have made progress, this transaction provides a significant amount of new capital that will help us realize the full potential of our asset base."

The Letter of Intent has been approved by the boards of directors of Crown Vantage and of Crown Paper and by the Official Committee of Unsecured Creditors. The acquisition is still subject to, among other things, the negotiation and execution of a definitive asset purchase agreement, due diligence and financing. The sale is also subject to the receipt of higher or better offers.

The United States Bankruptcy Court for the Northern District of California will hear the case on August 17 for approval of bidding procedures.

Crown Vantage, a manufacturer of value-added papers for printing, publishing and specialty packaging, currently operates nine mills internationally, with the capacity to manufacture more than 750,000 tons of specialty paper per year.

George Don, principal of CAC, says he is optimistic about the opportunities the acquisition will provide to both companies.

"We are excited to have the opportunity to make such a significant investment into Crown Paper and work with management and employees to realize the full potential of this company," Don says. "We believe the additional capital and the operating initiatives that are currently being put in place by Bob and his team mark a transition point for Crown Paper’s growth and development."