A PROMINENT toilet paper company with its products on shelves at retailers nationwide has gone under.
The brand officially filed for Chapter 11 bankruptcy protection earlier in April, citing financial struggles.
A popular toilet paper company has filed for bankruptcy (stock image)GETTY GettyCustomers buy products from the company at retailers like Trader Joe’s (stock image)[/caption]Founded in 1992, Phoenix, Arizona-based Royal Paper has manufactured bath tissue and other paper products.
It also serves as a third-party option to retailers like Trader Joe’s, Aldi, Kroger, and Whole Foods.
Royal Paper has also been committed to offering sustainable toilet paper to customers over the years.
“Just because we are committed to sustainability in everything we do, does not mean we lose sight of what’s important to you — product performance, reliability, and flexibility,” a statement on its website reads.
“In fact, we take great pride in our 98% on-time delivery record and ability to work with our partners to provide a wide range of package sizes and cost structures.”
Consumers may have seen products like Earth First, SuperSoft, or EcoFirst on shelves, all brands under Royal Paper’s purview.
Despite the bankruptcy filing, Royal Paper has noted an intention to restructure and re-emerge through new ownership.
That new owner, via an Asset Purchase Agreement (APA), is set to be Sofidel America Corp.
“To facilitate the transaction, Royal has filed for voluntary protection under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware,” a press release from the company noted.
“This action is expected to provide for a quick and orderly sale of the company’s assets under Section 363 of the Bankruptcy Code, with Sofidel serving as the ‘stalking horse bidder’ in a court-supervised auction and sale process.”
Sofidel would acquire all of Royal Paper’s assets in the deal.
Debts and assets for the company are between $100 and $500 million.
The deal has yet to be finalized, and there could be other potential buyers that emerge to make a bid.
NO SHORTAGES
Customers can also rest easy that Royal Paper expects operations to continue as normal through the bankruptcy process.
How does bankruptcy work?
Bankruptcy is a specific legal process that helps companies eliminate debt they can't repay.
The process allows businesses to start fresh and gain access to new credit.
Supervised by federal courts, bankruptcies allow a company to sell off its assets more easily to pay off creditors, according to Investopedia.
Chapter 11, a common process for companies, is used to restructure a business with the goal of remaining open – even if it means selling off most of the company’s properties.
Chapter 7, on the other hand, sells all of a company’s assets, putting it out of business.
Chapter 15, alternatively, allows for collaboration between American and foreign courts to conduct bankruptcy proceedings with “parties of interest involving more than one country,” per the United States Courts.
“Royal has received a commitment for debtor-in-possession (DIP) financing from its existing secured lenders to support the business through the sale process,” the filing noted.
“The company intends to pay vendors, suppliers, and other trade creditors in full under normal terms for goods and services provided during the bankruptcy case.”
Several popular retailers and restaurants have similarly gone through bankruptcy struggles in recent months.
NOT ALONE
Beloved gastropub Bar Louie, for example, filed in March for the second time in its history.
The first was during January 2020, ahead of the height of the coronavirus pandemic.
In the second filing submitted on March 26, 2025, $50 to $100 million in debt was cited, and it closed at least 14 locations.
Only 48 restaurants — 31 corporate and 17 franchised — remain in 19 states for the brand.
Retailers like Big Lots filed for Chapter 11 bankruptcy protection in September and have sold hundreds of store locations.
The same goes for fast fashion retailers like Forever 21, but it will shutter all its remaining locations for good.
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