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Recycled Paper Greetings not pleased by news that American Greetings bought some of its debt
By Angela McDaniels
Tacoma, Wash., Sept. 29 - Recycled Paper Greetings, Inc. said it was surprised to learn that American Greetings Corp. has acquired $44 million of its first-lien debt.
American Greetings made the disclosure in its earnings call for the quarter ended Aug. 29, according to a Recycled Paper Greetings news release.
"It is RPG's position that AG's actions represent a clear violation of a written confidentiality agreement executed as part of an overture by American Greetings," Recycled Paper Greetings chief executive officer Jude Rake said in the release.
"To that end, weeks before American Greetings made its announcement, we filed a lawsuit in the U.S. District Court for the Northern District of Illinois detailing our claim. We plan to continue vigorously fighting actions by AG, which we believe are predatory in nature and intended for the sole purpose of preventing us from conducting business on a fair playing field."
According to Recycled Paper Greetings, American Greetings said during the earnings call that its earnings had fallen short of analyst expectations.
"We find it curious that a much larger competitor is accumulating our debt in violation of a clear contract even as its own performance is weakening. We believe the acquisition of our debt by American Greetings reflects desperation because we are making significant, daily inroads on American Greetings in the marketplace," Rake said.
Recycled Paper Greetings, a Chicago-based greeting card company, said it will "vigorously" fight American Greetings' actions and will seek legal remedies and to pursue damages.
American Greetings is a Cleveland-based designer, manufacturer and seller of greeting cards and other social expression products.
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