HRHI Wind-down, LLC (f/k/a Royal Interco, LLC) Bankruptcy Case

Royal Paper has moved from asset-sale execution into estate-recovery mode. The docket shows eight July 22 adversary complaints seeking to avoid and recover alleged preferential transfers made during the January 8-April 8, 2025 preference period, starting with Convermat and running through WestRock - Southern Container. The targets are Convermat, CornerStone Adhesives & Packaging, El Paso Paper Box, International Paper, Print Pro, Southwest Forest Products, Sustana Fiber, and WestRock.

The asserted recoveries total roughly $7.8 million, led by Sustana at $3.4 million and International Paper at $2.6 million, with the complaints also seeking claim disallowance under section 502. Tobialaw flagged the cluster on August 26, but the underlying significance is the debtor-side litigation strategy: after the June sale closing, the wind-down estate is now pressing trade-vendor clawback claims that can affect claim reconciliation, settlement leverage, and expected unsecured-creditor recoveries.

HRHI Wind-down, LLC, formerly Royal Interco, is in a completed post-sale wind-down: Sofidel America Corp. purchased the business for $126 million, the Chapter 11 cases were dismissed on December 31, 2025, and the debtor entities were authorized to dissolve. The end state is dismissal and dissolution following an asset sale, rather than an operating reorganization.

Royal Interco and three paper-products affiliates commenced Chapter 11 on April 8, 2025, including through Royal Interco’s voluntary petitionDkt. 1. The first-day declarationDkt. 3 attributes the filing to labor shortages, a February 2024 distribution-center fire that impaired service levels and cash receipts, and tightening vendor credit that contributed to pulp shortages as liquidity deteriorated. At filing, the debtors owed at least $205.1 million under a senior secured NXT Capital facility and approximately $24.9 million in trade and other unsecured debt. Management changes in late 2024 installed an independent manager and chief restructuring officer, while a prepetition sale processDkt. 3 contacted 159 potential buyers, generated 14 nonbinding indications of interest, and produced an April 8 stalking-horse agreement under which Sofidel offered $126 million for substantially all assets, subject to higher bids and regulatory clearance.

Chapter 11 supplied liquidity and court supervision for that sale path. On May 5, the court’s final financing orderDkt. 146 authorized use of cash collateral and up to $10 million of postpetition debt from NXT Capital and its lender group, subject to a budget and sale milestones, while granting the DIP obligations superpriority status and liens and providing adequate protection for the prepetition lenders. The Sofidel sale followed on May 23. During the post-sale wind-down, Royal Paper pursued potential estate recoveries through preference complaints against El Paso Paper BoxDkt. 1, International PaperDkt. 1, and Sustana FiberDkt. 1. The December dismissal and authorized dissolution completed the case trajectory; no further restructuring milestones remain.

HRHI Wind-down, LLC (f/k/a Royal Interco, LLC)

HRHI Wind-down, LLC (f/k/a Royal Interco, LLC)

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Royal Paper launches preference litigation against trade counterparties

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