New York, June 4,  2021 – Carl Marks Advisors, a leading investment bank providing financial and operational advisory services to middle market companies, has concluded its engagement as the exclusive financial advisor to MidCap Financial (“MidCap”) in the sale of the assets of Paper Source, Inc. to Elliott Investment Management L.P. (“Elliott”). The sale was completed on May 27^th, 2021 under Section 363 of the U.S. Bankruptcy Code.

Paper Source filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code on March 2, 2021, at which time MidCap became both the DIP (debtor-in-possession) and senior lender to the retailer of cards, gifts, party supplies and fine paper. The retailer had experienced revenue declines in recent years, and its business was significantly impacted by the economic downturn during the COVID-19 pandemic.

“We are pleased with the outcome of this engagement, and to have helped facilitate a solution that keeps Paper Source operating and offers the promise of future success for all stakeholders,” said Jeffrey Pielusko, Director at Carl Marks Advisors. “Not only has MidCap achieved a full recovery of its financing commitments, but the sale to Elliott, which also owns Barnes & Noble, will provide Paper Source with a viable path toward growth.”

Carl Marks Advisors worked with MidCap to structure its stalking horse credit bid, and helped the firm achieve a full recovery of its post-petition financing and first-lien debt.

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