TCR_Public/951102.MBX BANKRUPTCY CREDITORS' SERVICE, INC.


Drypers Corporation reports third
        quarter results; Interest payment on notes deferred pending
        discussions with bondholders

        
             HOUSTON--Nov. 2, 1995--Drypers Corporation
        (Nasdaq:DYPR) today reported net sales of $43.3 million for the
        third quarter ended September 30, 1995, compared with $45.7 million
        for the same period of 1994.  The Company recorded a net loss for
        the recent quarter of $2.7 million, or $0.40 per share, compared
        with net income of $2.6 million, or $0.37 per share, in the third
        quarter of 1994.  
        


            The net loss reflected continued pricing pressures due to
        competitive conditions in the market for disposable baby diapers and
        related products, coupled with higher pulp prices than in the same
        period a year-ago.  The Company noted, however, that the recent
        quarter's results reflected an improvement over the 1995 second
        quarter, with net sales rising 14.7% and the net loss declining from
        $6.2 million, or $0.95 per share (which included a pretax
        restructuring charge of $3.0 million, or approximately $0.35 per
        share).  This improvement was attributed to gains in market share
        and unit volume, as well as achieving planned reductions in
        operating costs.  
        


            The Company also reported that it is in discussions with major
        lending institutions for a $25 million financing facility.  The
        proposed financing facility would replace Drypers' existing $15.0
        million revolving credit facility and $2.0 million term loan.
        Subject to receipt of a new credit facility, negotiation of terms
        and other approvals, Drypers' two largest equity holders have agreed
        to provide additional capital in an aggregate amount of $3.6 million
        to improve the Company's cash position.  Both the credit facility
        and the capital investment, if received, would be subject to
        amendment by holders of the Company's 12 1/2% Senior Notes of
        certain terms contained in the Indenture governing the Notes.  In
        the event that the Company is unable to obtain its proposed new
        credit and capital financing package, or upon obtaining this
        financing package is unable to secure amendments from the
        Noteholders, the Company may, as previously stated in a press
        release issued by the Company on August 4, 1995, be required to seek
        protection under the federal bankruptcy laws.  
        


            The Company also stated that pursuant to the 30-day grace period
        permitted in the Indenture, it has elected to defer the semi-annual
        interest payment due November 1, 1995, on the Notes and intends to
        begin discussions with Noteholders.  
        


            Walter V.  Klemp, Chairman and Co-Chief Executive Officer,
        noted, "Despite the loss for the third quarter, our operational turn-
        around is progressing as planned and there are several encouraging
        developments.  Market share has increased to the highest level we
        have seen in the past eight months, while promotional expenses have
        been lower than expected.  It appears pulp price increases have
        reached their peak as we are now seeing some price softening from
        suppliers.  We have completed the shut-down of our Houston diaper
        production operations, and our remaining plants are operating more
        efficiently with cost savings in excess of our plan.  Our Drypers
        brand is gaining new support among national mass merchant accounts,
        in addition to the improvement in our traditionally strong grocery
        store channel."  
        


            Mr.  Klemp added, "Gross margin improved from 27.7% to 29.6%
        between the second and third quarters of 1995, and SG&A expenses
        declined from 36.1% of net sales to 30.8% over the same period.  The
        Company also generated earnings before interest, taxes depreciation
        and amortization of approximately $1.4 million in the latest
        quarter. Pending receipt of the proposed debt and capital financing
        package and certain Indenture amendments from our Senior
        Noteholders, management continues to believe that the combination of
        this financing package, cost reductions and increased margin from
        the continued restoration of previous market share levels should
        ultimately allow the Company to regain profitability."    
        


            The Company also announced that for the nine months ended
        September 30, 1995, net sales were $117.4 million compared with
        $127.4 million in the same period of 1994.  The net loss was $12.1
        million, or $1.84 per share, compared with net income before
        extraordinary item of $5.5 million, or $0.91 per share, in the same
        nine months of 1994.  The net loss for the 1995 period included the
        restructuring charge noted above, related to the elimination of
        diaper production at Drypers' Houston plant, as well as an unusual
        expense of $2.4 million, or approximately $0.27 per share, for
        promotional and other expenses related to the repositioning of the
        Company's premium brand products.  Net income for the first nine
        months of 1994 included an unusual expense of $1.1 million, or $0.12
        per share, related to one-time legal expenses incurred in connection
        with a lawsuit between Drypers and Kimberly-Clark, and an
        extraordinary charge of $3.7 million, or $0.61 per share, related to
        the redemption of debt.  
        


            Drypers Corporation manufactures and markets disposable baby
        diapers and related products under the Drypers brand name.  The
        Company's products are sold through grocery stores and mass
        merchants throughout the United States, Latin America and other
        international markets.  The Company also produces price-value
        branded and private label diapers and related products.



                         DRYPERS CORPORATION (NASDAQ: DYPR)
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                       (In Thousands, Except Share Amounts)
                                    (Unaudited)
        
                              Three Months Ended  Nine Months Ended
                                September 30,       September 30,    
                               1995      1994      1995      1994  
        
        NET SALES                $ 43,295  $ 45,658  $117,393  $127,384
        COST OF GOODS SOLD         30,478    27,892    82,914    76,905
         Gross profit          12,817    17,766    34,479    50,479
        SELLING, GENERAL AND
         ADMINISTRATIVE EXPENSES    13,334    12,187    39,158    34,659
        UNUSUAL EXPENSES               --        --     2,358     1,141
        RESTRUCTURING CHARGE           --        --     2,972        --
         Operating income (loss)  (517)    5,579   (10,009)   14,679
        RELATED PARTY INTEREST
         EXPENSE                       92        94       278       188
        OTHER INTEREST EXPENSE, net 1,983     1,596     5,587     5,751
        OTHER INCOME                   --       352        --       352
        INCOME (LOSS) BEFORE INCOME
         TAXES AND EXTRAORDINARY
         ITEM                      (2,592)    4,241   (15,874)    9,092
        INCOME TAXES                   64     1,675    (3,803)    3,608
        INCOME (LOSS) BEFORE
         EXTRAORDINARY ITEM        (2,656)    2,566   (12,071)    5,484
        EXTRAORDINARY ITEM,
         net of taxes                  --        --        --    (3,688)
        NET INCOME (LOSS)        $ (2,656) $  2,566  $(12,071) $  1,796
        COMMON AND COMMON
         EQUIVALENT SHARES
         OUTSTANDING            6,600,866 6,984,737 6,574,218 6,009,088
        NET INCOME (LOSS) PER
         COMMON SHARE:
          Before extraordinary
           item                  $  (0.40) $   0.37  $  (1.84) $   0.91
          Extraordinary item           --        --        --     (0.61)
          Net income (loss)      $  (0.40) $   0.37  $  (1.84) $   0.30
        
                                DRYPERS CORPORATION
                            CONSOLIDATED BALANCE SHEETS
                                  (In Thousands)
        
                                            September December
                                               1995     1994  
                                           (Unaudited) (Audited)
        ASSETS:
        CURRENT ASSETS                          $ 36,728  $ 40,735
        PROPERTY AND EQUIPMENT, net of depreciation
         and amortization                         36,151    34,853
        OTHER ASSETS                              61,009    56,143
                                            $133,888  $131,731
        LIABILITIES AND STOCKHOLDERS' EQUITY:
        CURRENT LIABILITIES                     $ 37,971  $ 22,773
        LONG-TERM DEBT                            46,307    46,632
        OTHER LIABILITIES                          4,394     5,559
        STOCKHOLDERS' EQUITY                      45,216    56,767
                                            $133,888  $131,731

        CONTACT: Walter V. Klemp,
                 Chairman & Co-Chief,
                 Executive Officer,
                 (713) 682-6848
                       OR
                 Lynn Morgen/Howard Zar/Melissa Garelick,
                 Press: Stacy Berns,
                 Morgen-Walke Associates,
                 (212) 850-5600



        FOUNTAIN PHARMACEUTICALS' RE-ORGANIZATION PLAN CONFIRMED

        
            CLEARWATER, Fla., Nov. 2, 1995 -- href="chap11.fountain.html">Fountain
        Pharmaceuticals, Inc.
(OTC Bulletin Board: FPHI) announced today
        that the Amended Plan of Re-organization that had been submitted to
        the United States Bankruptcy Court was confirmed on November 1,
        1995.  In accordance with court procedure, unless appealed, the
        effective date of the plan is estimated to be on or around December
        15, 1995.
        


            Under the Amended Plan, creditors will be paid in full or in
        part depending on their treatment pursuant to the terms of the plan.
        Existing shareholders will retain their shares of outstanding common
        stock, and there will be an issuance of 25 million additional shares
        in exchange for a capital contribution to the company of $250,000 by
        the company's C.E.O.
        


            The Amended Plan, said the company was confirmed essentially as
        originally submitted and was approved overwhelmingly by all classes
        of creditors and the stockholders.  Further, the company said that
        the plan was confirmed over the objection of an individual
        stockholder who had challenged certain aspects of the plan.  The
        company is optimistic that any further legal action which might be
        taken by that shareholder would not have merit.
        


            The company said it would now proceed to pursue vigorously the
        opportunities for its technology and products as reflected in the
        confirmed plan.  The company also expressed its appreciation for the
        continued support of its creditors, shareholders, customers and
        employees.
        


            Fountain Pharmaceuticals, Inc. is a publicly traded company
        based in Clearwater, Florida, that specializes in the application of
        encapsulated delivery systems for the pharmaceutical and cosmetic
        industries.  The company's shares are traded in the "OTC Bulletin
        Board".
        


        /CONTACT:  John C. Walsh, President, Fountain Pharmaceuticals, Inc.,
        813-443-3888/




        PHAR-MOR REPORTS FIRST QUARTER INCREASE IN PRO FORMA NET INCOME;
        COMPANY RECEIVES AWARD FOR PRIVATE LABEL PERFORMANCE

        
            YOUNGSTOWN, Ohio, Nov. 2, 1995 -- href="chap11.pharmor.html">Phar-Mor, Inc. (Nasdaq
        Small Cap: PMOR) today announced the results for its first fiscal
        quarter, the thirteen weeks ended September 30, 1995.  For the 102
        deep discount drug stores the Company operates, net income for the
        period, on a pro forma basis (giving retroactive effect to fresh
        start accounting adjustments, elimination of non- recurring
        reorganization costs and adjusting interest expense to give effect
        to the new debt of the reorganized Company) was $890,000, or $.07
        per share, compared to $807,000, or $.07 per share for the
        comparable thirteen weeks ended October 1, 1994.
        


            Comparable store sales were $254.8 million for the period,
        compared to $275.7 million for the comparable thirteen week period
        of the prior year, a decrease of 7.6%.  The sales decrease was
        partially the result of transitioning the Company's promotional
        campaign during the late summer from an emphasis on grocery items to
        emphasizing the broad spectrum of the merchandise offered in its
        stores.
        


            The Company, as of November 1, 1995, had $85 million in cash
        (net of accrued payments associated with the bankruptcy proceeding)
        and approximately $163.3 million in long-term debt and capital lease
        obligations.  Long-term debt includes the debt assumed on September
        29, 1995, when the Company purchased the facility in which its
        Youngstown, Ohio headquarters is located.  In addition, the  Company
        has a $100 million revolving credit facility with BankAmerica which
        has not been drawn upon.
        


        Phar-Mor Cited for Excellence in Private Label Performance


            The Company also announced that it has been chosen as the
winner
        of the Private Label Manufacturers Association (PLMA) 1995 "Salute
        to Excellence" Award in the Drug Chain category.  The PLMA criteria
        for selecting Phar-Mor included the Company's marketing and
        merchandising policies, its product innovation and its overall
        commitment to private label.

        
            "The PLMA award is a tribute to our success in rolling out three
        new private label brands over the past several years," said Phar-Mor
        President David Schwartz.  "All of our brands have been chosen to
        meet the demands of today's consumers and are equal to or better
        than their national brand counterpart, while offering a better value
        and a 100% satisfaction guarantee."
   

     
            Phar-Mor is a deep discount retail drug store chain with 102
        stores in 18 states.  The Company's common stock is traded on the
        Nasdaq Small Cap Market under the symbol "PMOR."  The Company
        expects to be listed on the NASDAQ national market following the
        completion of the Securities and Exchange Commission's review of its
        registration statement on Form 10, which was filed with the S.E.C.
        on October 23, 1995.
      


  
                                  PHAR-MOR, INC.
               UNAUDITED CONSOLIDATED SUMMARY OF SALES AND EARNINGS
                     (In thousands, except per share amounts)
        
        PROFORMA:  (a)
                                              Successor Company
                                             Thirteen Weeks Ended
                                    September 30, 1995     October 1, 1994
        Sales                            $254,845              $275,686
        Income before income tax expense    1,484                 1,346
        Income tax expense                    594(b)                539(b)
        Net income                           $890                  $807
        Earnings per share                  $0.07                 $0.07
        
        AS REPORTED:
                          Successor Company         Predecessor Company
                                Four              Nine           Thirteen
                             Weeks Ended       Weeks Ended      Weeks Ended
                             September 30,     September 2,     October 1,
                                1995              1995             1994
        Sales                 $72,877(c)       $181,968(c)      $363,224(c)
        Income (Loss) before
         reorganization items,
         fresh start revaluation,
         extraordinary item and
         income taxes             146(c)       ($1,634)(c)      ($3,397)(c)
        Reorganization items                   (16,798)(d)       (3,189)(d)
        Fresh start revaluation                  8,043
        Extraordinary item - gain
         on debt discharge                     775,073
        Income (loss) before
         income taxes             146          764,684           (6,586)
        Income tax expense         58(b)               (b)              (b)
        Net income (loss)         $88         $764,684          ($6,586)
        Earnings per share      $0.01            N/M               N/M

        
        NOTES:


        /CONTACT:  Gary Holmes, 212-484-7736, for Phar-Mor/