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Standard Register Files for Chapter 11 Bankruptcy

Friday, March 13, 2015

By WhatTheyThink Staff

The Standard Register Company (the “Company”) today announced that it and its subsidiaries have filed voluntary petitions under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware.

The Company also announced that it is pursuing a sale process and has entered into an acquisition agreement with an affiliate of Silver Point Capital, L.P. The agreement was submitted to the Bankruptcy Court today. Under the proposed agreement, the Company’s assets will be sold for approximately $275 million plus the assumption of certain other liabilities. The sale agreement contemplates a Court-supervised auction process, which is designed to facilitate a competitive sale process. Subject to the results at auction, the closing of the transaction is subject to the satisfaction of usual and customary conditions, including obtaining Court approval and all necessary regulatory consents. The Company believes that this sale will right-size the business’ balance sheet by significantly reducing its outstanding indebtedness and other liabilities to better position the business for long-term growth and profitability in the hands of a capable buyer. Silver Point Capital is a private investment firm managing approximately $8.5 billion.

The Company is supported by its existing secured lenders, including Bank of America, N.A. and Silver Point, who have agreed to extend $155 million in financing in the form of a debtor-in-possession (DIP) credit facility. The DIP facility should provide the Company with ample liquidity to facilitate its sale process and to fund operations. The Company also has filed and expects to obtain approval for various customary motions seeking court authorization to continue to support its business operations during the sale process, including honoring employee wages and benefits in the ordinary course and honoring its customer programs. The Company intends to pay suppliers under normal terms for goods and services provided on or after the filing date of March 12, 2015. The Company appreciates the support of its customers and suppliers and expects to continue its relationships with them in the ordinary course of business.

“Standard Register has a fundamentally stable underlying business with a large, diverse customer base and a strong portfolio of solutions that include integrated communications, product marking and decoration (labels), document management, promotional marketing and technology/professional services, but our ability to invest in growth has been hampered by our debt structure and legacy liabilities,” said Joseph P. Morgan, Jr., president and chief executive officer.

“In response to the traditional print market decline, Standard Register repositioned itself as a market focused integrated communications provider where today, the majority of both revenue and profit are being derived.”

“The Board and management team have conducted a rigorous assessment of all of our strategic options and believe that this process represents the best possible solution for Standard Register. We are grateful for the support of our lenders and have sufficient financing to fund our operations as we complete a process that should result in greater flexibility for investment in the future,” concluded Mr. Morgan. “We are thankful to our dedicated employees who continue to work diligently to deliver value and a high level of customer service.”

As recently announced, Kevin Carmody, a Practice Leader with McKinsey Recovery & Transformation Services U.S., LLC, has been appointed Chief Restructuring Officer. The Company indicated that it expects to provide additional details with respect to the Chapter 11 filing as soon as they are available. More information, including access to court documents, can be accessed at http://cases.primeclerk.com/standardregister (court-appointed claims agent site) or www.deb.uscourts.gov, the official Bankruptcy Court website.

The Company’s shareholders are cautioned that trading in shares of the Company’s common stock during the pendency of the bankruptcy process will be highly speculative and will pose substantial risks. The Company believes it is probable there will be no recovery for any equity holder in the bankruptcy proceedings. Accordingly, the Company urges extreme caution with respect to existing and future investments in its common stock.

Additional information can also be found by visiting the Company’s website at www.standardregister.com and clicking on the link for Restructuring Information.

Standard Register’s legal advisor for the Chapter 11 proceedings is Gibson, Dunn & Crutcher LLP. Lazard Freres & Co. LLC serves as financial advisor to the Company.



By Ron Boyle on Mar 19, 2015

While sad, it's not too much of a surprise. My experiences with SR were never great. They always seemed more interested in winning the deal than in bringing real value. My favorite was a rep telling a client that they had packaging production facilities in China to win a deal and then.... seeing the exact same rep 2 days later asking on a LinkedIn group if anyone could suggest a good packaging firm to work with in ....China lol


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