Paper Source files for bankruptcy
Card and gift retailer Paper Source has filed for Chapter 11 bankruptcy with a plan to sell itself and close at least 11 stores, reports Retail Dive. The company, which runs 158 stores, has a stalking horse bid from current lenders led by MidCap Financial to buy the company and provide $16.5 million in financing. The stalking horse bid is valued at Paper Source’s debt obligations, including $16 million for a debtor-in-possession facility and $72.8 million on a first lien facility, according to court papers.
Now in bankruptcy, Paper Source is looking to turn keys to the company over to lenders, or a higher bidder. While an unfortunate turn, the stalking horse bid shows the lenders still see value in the retailer.
Paper Source aims to hold an auction for its business on April 21 and a sale hearing on April 30.
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