PHOENIX (News release) -- Royal Paper, LLC., a leading provider of high-quality paper products, announced that the Company has entered into an Asset Purchase Agreement ("APA") with Sofidel America Corp. ("Sofidel"), pursuant to which Sofidel will acquire substantially all of the Company's assets.
To facilitate the transaction, Royal has filed for voluntary protection under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. This action is expected to provide for a quick and orderly sale of the Company's assets under Section 363 of the Bankruptcy Code, with Sofidel serving as the "stalking horse bidder" in a court-supervised auction and sale process.
The agreement with Sofidel remains subject to Court approval and other customary conditions, including the receipt of any required regulatory approvals. The Sofidel APA is subject to higher and otherwise better offers received in the court-supervised process.
Royal intends to move through this process while operating in the ordinary course - providing the high-quality products that its customers and partners rely on. In connection with the proposed sale transaction, Royal has received a commitment for debtor-in-possession ("DIP") financing from its existing secured lenders to support the business through the sale process. The Company intends to pay vendors, suppliers, and other trade creditors in full under normal terms for goods and services provided during the bankruptcy case.
"Our team has been working diligently to strengthen our financial foundation in the face of difficult macroeconomic circumstances and other challenges facing Royal," said Steve Schoembs, Chief Executive of Royal. "Entering into an agreement with Sofidel provides stability for our business, its customers, and our employees, while we continue to run our sale process. I want to thank our incredibly talented employees for their continued focus and hard work, and our customers, partners, and suppliers for their support."
Additional information on the Company's Chapter 11 case can be found at https://dm.epiq11.com/RoyalPaper or call our dedicated number at (888) 874-8095 (for toll-free U.S. and Canada calls) or +1 (503) 897-9037 (for tolled international calls).
Royal is advised in this matter by Morris, Nichols, Arsht & Tunnell LLP as legal counsel, Novo Advisors as financial advisor, and Livingstone Partners as investment banker.
About Royal Paper
Founded in 1992 in Phoenix, AZ, Royal is a manufacturer and national supplier of high-quality paper products. The Company began as a family-owned business that operated a single converting line, supplying napkins and bath tissues to local retailers in Phoenix, Arizona. Since 1992, the Company has continuously evolved its production capacity to produce additional products in a broad range of configurations to a growing customer base. Today, the Company provides a full range of paper products--paper towels, bath tissues, facial tissues and napkins--across the value spectrum (from premium to value products), with manufacturing across the United States tailored to meet the specifications and standards of their customers.
