Royal Paper is a manufacturer and supplier of a diverse range of paper products, including toilet paper, paper towels, and napkins. The company filed for bankruptcy protection in April 2025 to facilitate the sales of assets. Sofidel America Corp. is the primary bidder and might be the next owner.
Highlights
- Royal Paper filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District of Delaware.
- Supervision and approval of the Court will aid in the fair transaction process.
- The brand will continue to manufacture and provide toilet paper essentials throughout the bankruptcy process.
Royal Paper Files for Bankruptcy Protection to Sell Assets
Royal Paper was founded in Phoenix in 1992. Since then, the company has been producing paper products such as paper towels, toilet paper, and more for various retail brands, private labels, and away-from-home categories.
Royal Paper has always focused on sustainability, quality, and competitive pricing, which has given it a positive reputation among customers. Its retail brands, like Earth First, SuperSoft, and EcoFirst, became preferable options for consumers in no time.
On April 8, 2025, the company filed for Chapter 11 bankruptcy protection in the U.S. Court. The filing details can be accessed here. The company has decided to transfer the assets through a smooth transaction with the help of the Court.
Under section 363 of the bankruptcy code, Royal Paper will carry out an orderly sale of its assets. Steve Schoembs, the CEO of Royal Paper, praised the diligent efforts of the team in facing the economic and other challenges. Key parties involved in the case are:
- Legal Counsel: Morris, Nichols, Arsht & Tunnell LLP
- Financial Advisor: Novo Advisors
- Investment Banker: Livingstone Partners
Who Will Gain Ownership?
As Royal Paper has entered the bankruptcy protection situation amid rising challenges, the brand plans to exit it by transferring ownership. An Asset Purchase Agreement (APA) has been signed between Royal Paper and Sofidel America Corp. As per this agreement, Sofidel will be the “stalker horse bidder.” If no better offer is received during the sales hearing, the ownership will be transferred to Sofidel.
This APA agreement ensures business stability for Royal Paper and supports its employees and customers. The Court’s supervision and approval will be considered final in the whole process.
Royal Paper will continue with its normal business operations. People will have an uninterrupted supply of paper toiletries, face tissues, and napkins. The company has received a debtor-in-possession (DIP) financing. This will avoid a situation of ceased operations. The secured lenders will look after the finances during the bankruptcy process. Vendors, suppliers, and other stakeholders will get their payments as per normal terms and conditions.
