The Chapter 11 cases are no longer active: after selling substantially all assets to Sofidel America Corp. for $126 million, the debtors obtained dismissal effective December 31, 2025, received authority to dissolve their entities, and renamed Royal Interco, LLC as HRHI Wind-down, LLC for the residual wind-down. Royal Interco and three operating affiliates commenced the cases on April 8, 2025, through their voluntary petitionsDkt. 1. The filing followed a year of operating and liquidity pressure: labor shortages and a February 2024 distribution-center fire impaired service levels and cash receipts, while an approaching secured-debt maturity prompted suppliers to tighten terms and contributed to raw-material shortages. At filing, the group reported at least $205.1 million under its NXT Capital secured facility and approximately $24.9 million of unsecured trade debt, as detailed in the first-day declarationDkt. 3.
The restructuring was designed as an expedited going-concern sale rather than a standalone reorganization. Before filing, the debtors’ banker contacted 159 potential buyers and received 14 nonbinding indications of interest; the debtors then entered into a $126 million stalking-horse agreement with Sofidel, subject to higher bids and regulatory approval. To preserve operations through that process, NXT and the prepetition lender group provided a $10 million new-money DIP facility with no roll-up. The final DIP and cash-collateral orderDkt. 146 authorized the full commitment, granted superpriority claims and priming and replacement liens, and limited borrowing and cash-collateral use to the approved budget and sale milestones. Sofidel completed the acquisition on May 23, 2025, shifting the estates from an operating sale process to asset recovery and wind-down.
After the sale, affiliate Royal Paper pursued preference recoveries and related claim disallowance, including actions against El Paso Paper BoxDkt. 1, International PaperDkt. 1, and Sustana FiberDkt. 1. The subsequent dismissal and dissolution order ended the Chapter 11 cases rather than confirming a plan, so there are no remaining case hearings or restructuring milestones reflected in the record.
