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GAYLORD ANNOUNCES ALLOCATION OF CONSIDERATION

 GAYLORD ANNOUNCES ALLOCATION OF CONSIDERATION
 DEERFIELD, Ill., Oct. 27 /PRNewswire/ -- Gaylord Container


Corporation (AMEX: GCR) announced today that, based on option elections made by holders of its subordinated debt pursuant to its prepackaged plan of reorganization, the new senior subordinated debt and equity in the company will be allocated as follows:
 Option I
 For each $1,000 of claim (principal amount of old subordinated debt and accrued but unpaid interest through Dec. 31, 1991), holders electing Option I will receive $400 principal amount of 13-1/2 percent senior subordinated debentures due 2003, 13.1636 shares of Class A common stock of Gaylord, and 66.9433 redeemable exchangeable warrants to obtain Class A common stock (collectively, an Option I Unit). Upon issuance of the notes, holders will also receive accrued interest on the new 13-1/2 percent notes for the period Jan. 1, 1992 to the prepackaged plan consummation date.
 Option II (Prorated)
 Under the terms of the plan, holders electing Option II will be prorated such that they will receive Option I Units (described above) with respect to 69.6169 percent of their claim and Option II Units with respect to 30.3831 percent of their claim. For each $1,000 of claim, an Option II Unit consists of $1,000 principal amount of 10-1/4 percent senior subordinated PIK notes due 2001 and 6.8218 warrants. In addition to accrued interest on the 13-1/2 percent Notes, holders electing Option II will receive accrued interest on the new 10-1/4 percent Notes with 3-3/4 percent paid in cash and 6-1/2 percent paid in additional 10-1/4 percent notes for the period Jan. 1, 1992 to the consummation date.
 Option III (70/30 Election)
 Holders electing Option III will receive Option 1 Units with respect to 70 percent of their claim and Option II units with respect to 30 percent of their claim. Holders will receive accrued interest on the new 13-1/2 percent notes and the new 10-1/4 percent notes for the period Jan. 1, 1992 to the consummation date.
 The company said that the new notes will be issued and the cash consideration will be paid to holders as soon as practicable after consummation of the prepackaged plan.
 Gaylord Container Corporation is a major national manufacturer and distributor of corrugated containers, containerboard, unbleached kraft paper, multiwall bags and grocery bags and sacks.
 Attachments: Allocation of Consideration for Holders Electing Option I, Option II, and Option III.
 GAYLORD CONTAINER CORPORATION
 Allocation of Consideration To Holders of Old Subordinated Notes
 Per $1,000 Principal Amount (A)
 For Each $1,000 Principal Amount Of: Amount of Claim(B)
 13-1/2 percent subordinated
 Notes Due 1996 $1,158.79
 13-1/2 percent subordinated
 Notes Due 1998 $1,152.38
 16-1/2 percent discount subordinated
 Notes Due 1998 $1,020.63
 13-3/4 percent subordinated
 Debentures Due 2001 $1,123.86
 ALL OPTION I
 For Each $1,000 Principal Principal Amount of No. of Shares
 Amount Of: 13-1/2 percent sr. of Gaylord Class A
 subord. debentures comm. stock
 due 2003 (New 13- (comm. stock)
 1/2 percent notes)
 13-1/2 percent subordinated
 Notes Due 1996 $463.52 15.2538
 13-1/2 percent subordinated
 Notes Due 1998 $460.95 15.1695
 16-1/2 percent discount subordinated
 Notes Due 1998 $408.25 13.4352
 13-3/4 percent subordinated
 Debentures Due 2001 $449.54 14.7940
 ALL OPTION I
 For Each $1,000 Principal No. of Redeemable Accrued
 Amount Of: Exchangeable Interest
 Warrants to obtain from 1/1/92
 common stock thru
 (warrants) 11/1/92 (C)
 13-1/2 percent subordinated
 Notes Due 1996 77.5732 $52.32
 13-1/2 percent subordinated
 Notes Due 1998 77.1441 $52.03
 16-1/2 percent discount subordinated
 Notes Due 1998 68.3243 $46.08
 13-3/4 percent subordinated
 Debentures Due 2001 75.2349 $50.74
 GAYLORD CONTAINER CORPORATION
 Allocation of Consideration To Holders of Old Subordinated Notes
 Per $1,000 Principal Amount (A)
 For Each $1,000 Principal Amount Of: Amount of Claim(B)
 13-1/2 percent subordinated
 Notes Due 1996 $1,158.79
 13-1/2 percent subordinated
 Notes Due 1998 $1,152.38
 16-1/2 percent discount subordinated
 Notes Due 1998 $1,020.63
 13-3/4 percent subordinated
 Debentures Due 2001 $1,123.86
 ALL OPTION II (Prorated 69.6169/30.3831)
 69.6169 Percent Option I Units
 For Each $1,000 Principal Amount No. of Shares
 Principal Amount Of: of New 13-1/2 pct. of common stock
 13-1/2 percent Notes
 subordinated
 Notes Due 1996 $322.69 10.6193
 13-1/2 percent subordinated
 Notes Due 1998 $320.90 10.5605
 16-1/2 percent discount subordinated
 Notes Due 1998 $284.21 9.3531
 13-3/4 percent subordinated
 Debentures Due 2001 $312.96 10.2992
 ALL OPTION II (Prorated 69.6169/30.3831)
 69.6169 Percent Option I Units
 For Each $1,000 No. of Warrants Accrued intrest
 Principal Amount Of: 1/1/92 thru
 11/1/92 (C)
 13-1/2 percent
 subordinated
 Notes Due 1996 54.0041 $36.42
 13-1/2 percent subordinated
 Notes Due 1998 53.7053 $36.22
 16-1/2 percent discount subordinated
 Notes Due 1998 47.5653 $32.08
 13-3/4 percent subordinated
 Debentures Due 2001 52.3762 $35.33
 ALL OPTION II (Prorated 69.6169/30.3831)
 30.3831 Percent Option II Units
 For Each $1,000 Principal Amount of 10-1/4
 Principal Amount Of: percent sr. subord. PIK Number
 Notes Due 2001 (New 10-1/4 of
 percent notes) Warrants
 13-1/2 percent
 subordinated
 Notes Due 1996 $352.08 2.4018
 13-1/2 percent subordinated
 Notes Due 1998 $350.13 2.3885
 16-1/2 percent discount subordinated
 Notes Due 1998 $310.10 2.1154
 13-3/4 percent subordinated
 Debentures Due 2001 $341.46 2.3294
 ALL OPTION II (Prorated 69.6169/30.3831)
 30.3831 Percent Option II Units
 For Each $1,000 Accrued Interest
 Principal Amount Of: 1/1/92 thru
 11/1/92 (C)
 Cash PIK
 13-1/2 percent
 subordinated
 Notes Due 1996 $11.04 19.13
 13-1/2 percent subordinated
 Notes Due 1998 $10.98 19.03
 16-1/2 percent discount subordinated
 Notes Due 1998 $ 9.73 16.85
 13-3/4 percent subordinated
 Debentures Due 2001 $10.70 18.56
 GAYLORD CONTAINER CORPORATION
 Allocation of Consideration to Holders of Old Subordinate Notes
 Per $1,000 Principal Amount (A)
 For Each $1,000 Principal Amount Of: Amount of Claim(B)
 13-1/2 percent subordinated
 Notes Due 1996 $1,158.79
 13-1/2 percent subordinated
 Notes Due 1998 $1,152.38
 16-1/2 percent discount subordinated
 Notes Due 1998 $1,020.63
 13-3/4 percent subordinated
 Debentures Due 2001 $1,123.86
 OPTION III - 70/30 Election
 70 Percent Option I Units
 For Each $1,000 Principal Principal amount No. of shares
 Amount Of: of New 13-1/2 of common stock
 percent notes
 13-1/2 percent subordinated
 Notes Due 1996 $324.46 10.6777
 13-1/2 percent subordinated
 Notes Due 1998 $322.67 10.6186
 16-1/2 percent discount subordinated
 Notes Due 1998 $285.78 9.4046
 13-3/4 percent subordinated
 Debentures Due 2001 $314.68 10.3558
 OPTION III - 70/30 Election
 70 Percent Option I Units
 For Each $1,000 Principal Accrued Interest
 Amount Of: No. of warrants 1/1/92 thru
 13-1/2 percent subordinated 11/1/92(C)
 Notes Due 1996 54.3013 $36.62
 13-1/2 percent subordinated
 Notes Due 1998 54.0009 $36.42
 16-1/2 percent discount subordinated
 Notes Due 1998 47.8270 $32.26
 13-3/4 percent subordinated
 Debentures Due 2001 52.6644 $35.52
 OPTION III - 70/30 Election
 30 Percent Option II Units
 Principal Amount No. of Warrants
 For Each $1,000 Principal of New 10-1/4
 Amount Of: percent notes
 13-1/2 percent subordinated
 Notes Due 1996 $347.64 2.3715
 13-1/2 percent subordinated
 Notes Due 1998 $345.71 2.3584
 16-1/2 percent discount subordinated
 Notes Due 1998 $306.19 2.0888
 13-3/4 percent subordinated
 Debentures Due 2001 $337.16 2.3000
 OPTION III - 70/30 Election
 30 Percent Option II Units
 Accrued Interest
 For Each $1,000 Principal 1/1/92 thru 11/1/92 (C)
 Amount Of: Cash PIK
 13-1/2 percent subordinated
 Notes Due 1996 $10.90 18.89
 13-1/2 percent subordinated
 Notes Due 1998 $10.84 18.79
 16-1/2 percent discount subordinated
 Notes Due 1998 $ 9.60 16.64
 13-3/4 percent subordinated
 Debentures Due 2001 $10.58 18.32
 (A) The new senior subordinated notes will be issued in denominations of $100 and integral multiples thereof. Cash will be paid in lieu of fractional amounts of the new senior subordinated notes. Shares of common stock and warrants will be rounded to the nearest whole amounts. No fractional shares of common stock or warrants will be issued, nor will separate payment be made with respect to fractional amounts. Actual consideration received by holders of old subordinated notes may vary from amounts indicated in the table due to the aforementioned factors and due to rounding.
 (B) Claim is the principal amount of old subordinated notes plus accrued but unpaid interest through Dec. 31, 1991.
 (C) Accrued interest is calculated on actual principal amount of new senior subordinated notes issued at the annual rate of 13-1/2 percent or 10-1/4 percent, as the case may be, prorated for a period from Jan. 1, 1992 to the consummation date, based on a 360 day year. The accrued interest calculations in the table assume a Nov. 2, 1992 consummation date. Consequently, the amount of accrued interest a holder receives may vary from the amount indicated in the table due to the consummation date assumption and due to rounding.
 -0- 10/27/92
 /CONTACT: Kathryn Chieger of Gaylord Container Corporation, 708-405-5645/
 (GCR) CO: Gaylord Container Corporation ST: Illinois IN: PAP SU: ERN


LD-OS -- NY085 -- 5611 10/27/92 16:14 EST
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