paragon restructuring is beginning to take shape

paragon AG / Insolvency/Change of Personnel 20.01.2010 Dissemination of an Ad hoc announcement according to § 15 WpHG, transmitted by DGAP - a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- Delbrück, January 20, 2010: paragon AG is to be continued as a going concern, as previously announced. The local court in Paderborn opened the Company's insolvency proceedings on January 1 this year. Dr. Frank Kebekus, an attorney who runs a law firm in Paderborn, has been appointed as insolvency administrator. The Company plans to file its finalized insolvency plan with the local court in Paderborn over the next few days. A debtor-in-possession (DIP) loan that had been extended but not drawn down has now been cancelled. The timetable for the forthcoming insolvency proceedings has now been finalized. Dr. Kebekus will inform the Company's creditors about the current status of these proceedings at a creditors' meeting on February 19, 2010. A special consultation meeting will subsequently be held to discuss the Company's insolvency plan. The receivables entered in the insolvency register will be examined as part of a written procedure on March 5. Personnel-related decisions were also taken at the time the Company's insolvency proceedings were being opened. Chief executive officer Klaus Dieter Frers and restructuring director Andrew Seidl are to remain in post, while chief financial officer Markus Werner will step down from the executive board by mutual consent as of January 31 this year; his duties will be performed by others at the Company until further notice. At the beginning of this year the Company possessed an adequate liquidity buffer. Due to an upturn in business, paragon is once again able to pay its wages and salaries as well as VAT in full. According to Frers, the Company is able to finance itself from its own resources. paragon AG is a direct supplier to the automotive industry and is listed on the Deutsche Börse Prime Standard index in Frankfurt/Main, Germany. The Company develops, manufactures, and markets innovative solutions in its Automotive (Sensors/Actuators and Cockpit Systems) and Electronic Solutions divisions. Its product portfolio includes the world's leading AQS air quality sensor by far as well as hands-free speaking equipment and instrumentation systems. In addition to its headquarters in Delbrück, North Rhine-Westphalia, paragon also operates locations in Suhl, Thuringia; St. Georgen, Baden-Württemberg; Nuremberg, Bavaria; and Heidenheim, Baden-Württemberg. In fiscal 2007, the paragon Group generated sales totaling EUR108.9 million with a workforce of 594 employees. paragon AG Schwalbenweg 29 33129 Delbrück Phone: +49 (0) 52 50 - 97 62 - 0 Fax: +49 (0) 52 50 - 97 62 - 60 Internet: www.paragon-online.de Press Officer Matthias Hack Phone: +49 (0) 52 50 - 97 62 - 141 Fax: +49 (0) 52 50 - 97 62 - 60 E-mail: matthias.hack@paragon-online.de Corporate Communications Marc Götte Phone: +49 (0) 52 50 - 97 62 - 161 Fax: +49 (0) 52 50 - 97 62 - 60 E-mail: marc.goette@paragon-online.de 20.01.2010 Ad hoc announcement, Financial News and Media Release distributed by DGAP. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------------- Language: English Company: paragon AG Schwalbenweg 29 33129 Delbrück Deutschland Phone: +49 (0)5250 97 62 - 0 Fax: +49 (0)5250 97 62 - 60 E-mail: investor@paragon-online.de Internet: www.paragon-online.de ISIN: DE0005558696 WKN: 555869 Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, München, Düsseldorf, Hamburg, Stuttgart End of News DGAP News-Service ---------------------------------------------------------------------------