Recycled Paper Greetings granted court approval for plan of reorganization

By Jennifer Lanning Drey

Portland, Ore. Feb. 18 - Recycled Paper Greetings, Inc. obtained court approval for its plan of reorganization from the U.S. Bankruptcy Court for the District of Delaware, according to a Wednesday filing.

As previously reported, Recycled Paper will be sold to American Greetings Corp. under the pre-packaged plan.

Treatment of creditors will include:

• Holders of debtor-in-possession financing claims, administrative expense claims, priority tax claims, compensation and reimbursement claims, other priority claims, general unsecured claims and secured tax claims will be paid in full;

• Holders of first-lien lender claims will recover 69.2% through a share of AG first-lien cash, AG notes and $19.55 million of new AG notes;

• Holders of second-lien lender claims will recover 11.3% through $13.15 million in new AG notes;

• Holders of equity interests in Recycled Paper and its subsidiaries will recover 100%; and

• Holders of contingent claims and insider claims, intercompany claims and equity interests in RPG Holdings will receive no distribution.

Recycled Paper Greetings, a Chicago-based greeting card company, filed for bankruptcy on Jan. 2. Its Chapter 11 case number is 09-10002.

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