

                                                                      Exhibit 99


NEWS RELEASE
                           FOR:              AMERICAN WHITE CROSS, INC.

                           CONTACT:          Scott Vertrees
                                             Vice Chairman
                                             (714) 248-8900

                                             Thomas Rallo
                                             Senior Vice President,
                                             Finance and Administration
                                             (860) 779-4114

FOR IMMEDIATE RELEASE


                 AMERICAN WHITE CROSS, INC. REACHES AGREEMENT ON
                PRINCIPAL TERMS OF PLAN TO EMERGE FROM BANKRUPTCY


     DAYVILLE, CT., MAY 6, 1997 -- American White Cross, Inc. - DIP (Nasdaq:
AWCIQ) today announced it has reached an agreement with its major lenders and
Official Committee of Unsecured Creditors on the principal terms of a formal
plan of reorganization.

     The terms provide for the treatment of all existing creditors, and call for
the Company's unsecured creditors to exchange their claims for common stock in
the reorganized company. Existing shareholders would exchange their shares for
approximately 3% of the reorganized company.

     A formal plan of reorganization is expected to be filed with the Bankruptcy
Court in approximately four weeks. The plan of reorganization and the proposed
treatment of creditors and shareholders thereunder is subject to solicitation of
acceptances of the plan and approval of the Bankruptcy Court. The Company's
agreement with its creditors requires that the Company emerge from Chapter 11 no
later than August 31, 1997.

     This agreement follows the completion of the divestiture of the Company's
cotton products business on April 22, 1997, which is intended to allow the
Company to focus on its core first aid business, which includes adhesive
bandages, medical tapes, sterile bandages, operating room sponges, esmark
bandages and other first aid related products. The Company

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also sells adhesive bandages under its own national brands, including Looney
Tunes(TM) (marketed under license from the Warner Bros. Division of Time Warner
Entertainment Company L.P.) and STAT-STRIP(R) (easy opening bandages).


