Creditors Work Out Deal With Standard Register, Drop Suit

DAYTON, Ohio—June 24, 2015—A $5 million settlement has been reached between Standard Register and a group of unsecured creditors stemming from Standard's 2013 acquisition of WorkflowOne. The agreement satisfying some of the creditors should help pave the way for Taylor Corp. to complete its deal to obtain Standard Register, the Dayton Business Journal reported.

The settlement, filed with the U.S. Bankruptcy Court last Friday, sees the official committee of unsecured creditors dropping any and all claims against Standard Register and stakeholder Silver Point Capital. The $5 million will be taken from a fund that would have gone toward second-lien lenders at the conclusion of Standard Register's Chapter 11 settlement.

The unsecured creditors had argued that the 2013 purchase of WorkflowOne was a "fraudulent" deal that left Standard Register insolvent, and the court had allowed the suit to move forward. These creditors had sought, among other things, to move higher on the Chapter 11 payment list once the bankruptcy case was settled.

As part of the settlement, the unsecured creditors will receive an additional percentage of what the second-lien lenders recoup in the bankruptcy, and upwards of $2 million of advisor costs for the committee, to be paid by a wind down reserve. The deal will still stand if Taylor Corp. doesn't complete the acquisition of Standard Register, but it is subject to approval by the bankruptcy court, the newspaper said.