Dive Brief:
Card and gift retailer Paper Source has filed for Chapter 11 bankruptcy with a plan to sell itself and close at least 11 stores.
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.
Dive Insight:
Roughly a year ago, Paper Source was a beneficiary of the fall of a rival, the card and stationery store chain Papyrus, which liquidated in early 2020. At the time, Paper Source took over 30 of Papyrus stores, expanding Paper Source s store fleet by more than 20%.