Since Paramount Cards Co. went into state receivership more than a month ago, its assets have attracted many bidders, including Hallmark Cards Inc., which recently acquired $8 million worth of its equipment, machinery, inventory and intellectual property.
Hallmark spokeswoman Linda Odell said the greeting card giant purchased the assets because “Paramount supplied greeting cards to a number of retailers in the U.S. and Canada, and we hope to be able to become their supplier as well.”
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Hallmark bought $1.24 million in inventory from Paramount’s facility in Pawtucket, as well as intellectual properties including designs, patterns and images for greeting cards, said Providence lawyer Allan Shine of Winograd, Shine & Zacks PC, the court-appointed receiver.
“We, of course, already have a wealth of creative assets,” said Odell. “But there is also very good work within Paramount’s digital and print image collection that can expand our existing image base for production of cards and other products.”
Whether all proceeds of the sale will go to Citizens Bank (Paramount’s largest creditor) and other creditors will be determined in court this week, Shine said.
Citizens claims it is owed more than $42 million – a key reason it asked for Paramount to be put into receivership, which allows the company to continue operations while its assets are sold off, in hopes of creating more value for creditors than the auction sale that probably would follow a Chapter 7 bankruptcy declaration.
Shine said it is unknown whether the sale of all assets will cover Paramount’s debts.
“We sold for as much as the receiver can get,” he said. “We hope it’s above market value, or at least market value. Every sale is different. Every asset and sale of business is different. The receiver’s job is to get as much as possible.”
The CardSmart franchise, with about 150 discount greeting-card stores, has several bidders, Shine said. “We hope to be filing a proposal within the next few weeks.”
Bidders also have appeared for Paramount’s remaining assets, which include an old mill building in Pawtucket, $10.9 million in account receivables and a retainer set aside for a possible Chapter 11 bankruptcy filing, Shine said. Those bids have not been made public.
Meanwhile, a job fair last month – organized by netWORKri and the R.I. Department of Labor and Training’s Adult and Dislocated Worker Unit, specifically for the Paramount workers – drew about 68 of the 126 people laid off from the company’s Pawtucket headquarters.
Eleven employers participated, said George Burke, the unit’s special project manager, but only five employment contracts are pending as a result of the career fair.
Nevertheless, he said the effort to relocate workers “was probably one of the best practices under those conditions.”
Paramount gave just half a day’s notice to its employees and the state when it decided to shut down in July. It ran into trouble after consolidating production last fall in Cambridge, Ontario. The consolidation was “more expensive than they had anticipated,” said Brian Dobson, of Dobson Communications Inc., former spokesman for Paramount. The expense caused the company’s lenders and investors to pull out, and left about 1,200 U.S. and Canadian employees without jobs.
Burke said his unit had succeeded in reaching 96 of the local displaced workers, about 40 of whom have registered for résumé-building and other workshops through netWORKri’s center in Pawtucket. It was unknown how many have found other jobs.
