Standard Register Sues Board, Investment Firm Over WorkflowOne Acquisition
U.S. Bankruptcy Court allowed Dayton, Ohio-based Standard Register standing to file a lawsuit against Silver Point Capital and certain Standard Register directors and officers last week.
The company does not expect the decision of this lawsuit to affect the sales process, but Standard Register is not commenting further.
Silver Point and the executives involved in the lawsuit were charged with 15 counts of fraudulent transfers related to the WorkflowOne acquisition, according to the Dayton Daily News. Court documents noted the transaction left Standard Register "insolvent, undercapitalized and unable to pay their debts as they came due." The suit seeks unspecified damages from Standard Register's board of directors and some key officers as well as fees and transaction bonuses tied to the acquisition.
Standard Register filed for bankruptcy and entered into a $275 million acquisition agreement with Silver Point in March. Standard Register acquired WorkflowOne in a transaction valued at $218 million, financed by assuming $210 million of long-term debt and the issuance of warrants with an estimated value of $8 million in 2013.
The lawsuit would set aside the debt from the acquisition, moving unsecured creditors higher on the priority list to get money when the bankruptcy is settled, according to the Dayton Business Journal.
Bids were due last Thursday, and the auction was held yesterday, with the new owner being announced tomorrow, Standard Register announced.