Recycled Paper Greetings 'surprised' at comments

On American Greetings' earnings call Friday, executives said they couldn't discuss the deal further, as Recycled Paper is trying to restructure its balance sheet.

In a statement Monday, Recycled Paper Chief Executive Jude Rake said the company was caught off-guard by American Greetings' disclosure of its accumulation of Recycled Paper's debt and the inability to offer more information.

"We were surprised both by American Greetings' disclosure of its accumulation of Recycled Paper Greetings debt on its quarterly earnings conference call, as well as the stated answer for American Greetings' inability to speak further about its actions when questioned by analysts," Rake said.

Rake also said American Greetings' actions violate a written confidentiality agreement.

"We find it curious that a much larger competitor is accumulating our debt in violation of a clear contract, even as its own performance is weakening," Rake said in a statement.

A representative for American Greetings could not be immediately reached for comment.

American Greetings on Friday said second-quarter profit tumbled 73 percent on lower margins and higher costs for product investment to drive sales growth.

Shares of American Greetings fell 37 cents, or 2.3 percent, to $16.76 in midday trading.