Park is also a board director at Dollar Tree Stores and Express.Īs Paper Source progresses through bankruptcy, it proposed to the bankruptcy court that it pay its top seven executives a combined additional $1 million in bonuses if they met certain benchmarks. The company’s CEO, Winnie Park, received a $552,000 annual salary, a $250,000 bonus related to the sale of Papyrus stores and a $390,000 year-end bonus. When asked in the April 8 meeting of creditors why Paper Source paid those bonuses when the company was struggling, Paper Source Chief Financial Officer Ronald Kruczynski told the court that “it was to recognize, certainly, members of management for navigating the organization through the unprecedented pandemic.” He added that the bonuses were all designed to incentivize executives to stay.ĭuring 2020, as Paper Source stores started to close, the company still paid its top five executives a combined $1.9 million in salaries, $560,000 in bonuses related to a deal with Papyrus and a $910,000 in year-end bonuses, according to bankruptcy filings.

“Without any explanation or rationale about why the top executive would be entitled to bonuses, bonuses make no sense,” said Barbara Yong, an attorney with the law firm Golan Christie Taglia, who is representing 35 stationery vendors owed money by Paper Source. Three vendors interviewed for this article say they are struggling to be repaid $5,000 to $20,000. Tripplaar Kristoffer / Sipa USA via APīut since its filing, dozens of greeting card vendors have come forward to say the company placed unusually large orders right before bankruptcy and then failed to pay them, leaving them owed thousands of dollars.

Now, the company will close 11 of its stores but continue operating its other retail locations and e-commerce website. Weeks before the coronavirus pandemic hit in March 2020, Paper Source bought 30 stores from its competitor Papyrus, following that company’s liquidation. The company, founded by Susan Lindstrom in 1983, began as a single store in Chicago and, as of its filing date, grew to 158 locations. The card shop filed for Chapter 11 bankruptcy on March 2 in the Eastern District of Virginia, allowing it to restructure its more than $100 million in debt and shed expensive leases, which cost the company $36 million annually, without completely shutting its doors. The case illustrates why Congress made sweeping changes to the bankruptcy code in 2005, he wrote, adding, “The Debtors have failed to meet their burden to demonstrate that the proposed bonus plan overcomes the restrictions Congress implemented.”

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