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Royal Paper has filed for Chapter 11 bankruptcy to help sell its business to Sofidel America, the company announced in a news release on Tuesday, April 8. Royal offers products at many retailers, including Aldi, Trader Joe's, and Whole Foods.
The Phoenix-based company has signed an asset purchase agreement with Sofidel, a global paper manufacturer, which would take over most of Royal's assets through a court-supervised auction process.
"Our team has been working diligently to strengthen our financial foundation in the face of difficult macroeconomic circumstances and other challenges facing Royal," said CEO Steve Schoembs. "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."
To keep operations running, Royal secured new financing from its current lenders. The company said it plans to continue supplying customers, along with fully paying vendors and suppliers during the bankruptcy process.
Founded in 1992, Royal grew from a small family operation in Arizona into a national manufacturer of toilet paper, napkins, paper towels, and facial tissues. Some brand names of Royal's products include Earth First, SuperSoft, EcoFirst, and Platinum.
The deal still needs approval from a Delaware bankruptcy court and could be challenged by higher bids.
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