The owner of Barnes & Noble is purchasing Paper Source.
Hedge fund Elliott Investment Management said it entered an agreement to buy the Chicago-based greeting cards and gifts retailer, which filed for Chapter 11 bankruptcy protection in March.
The acquisition will let Paper Source “emerge from Chapter 11 with the support of a well-capitalized owner committed to the development and growth of the business,” Elliott said in a news release.
The purchase price was more than $91.5 million, including $40 million in cash and $51.6 million in loans, according to bankruptcy court records.
Paper Source, founded in 1983, had been expanding rapidly before the pandemic. It purchased 27 leases from bankrupt rival Papyrus last spring, weeks before all 160 stores were forced to close.
Elliott said it will have about 130 stores going forward. It will also work with Barnes & Noble, where the bookseller’s CEO, James Daunt, will have “oversight responsibilities” for both companies, though the business will operate independently, Elliott said.
“All of us at Paper Source are delighted with Elliott’s investment in the brand and look forward to working with them, and with James and the team at Barnes & Noble,” Paper Source CEO Winnie Park said in the news release.
The sale requires the bankruptcy court’s approval and a hearing has been set for Thursday in the U.S. Bankruptcy Court for the Eastern District of Virginia.
