ST. LOUIS PARK, MN-Paper Warehouse recently filed its liquidation plan as part of its proceedings under Chapter 11 of the federal bankruptcy code in the U.S. Bankruptcy Court in Minnesota. If confirmed by the bankruptcy court, the remaining assets of the party goods retail will be sold and the proceeds distributed to creditors. Since the company’s debts substantially exceed the value of its assets, there will be no distribution to shareholders.

In August 2003, Paper Warehouse Inc. sold most of its assets to Party America, a competitor based in Alameda, CA, and stopped operating its business. The deal included Paper Warehouse’s 62 corporate stores and its franchisee business, which includes 51 franchisees in 22 states.

At the time of the sale, the company essentially went out of its business. Paper Warehouse had filed for Chapter 11 in June of last year, and had started to close stores shortly thereafter.

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