American Greetings acquisition runs into resistance

American Greetings Corporation (NYSE: AM) 's announcement that it will acquire bankrupt competitor Recycled Paper Greetings is running into some fierce resistance from a major investor in Recycled Paper.

RPG Investment Holdings LLC and Monitor Clipper Partners voiced their opposition with RPGI director and Monitor Clipper partner Travis Metz saying that "Through its unlawful actions, we believe American Greetings is attempting to eliminate Recycled Paper Greetings as a competitor, in an effort to gain more widespread traction in the lucrative market segment in which Recycled Paper Greetings excels."

Doesn't "excel" seem like a pretty strong word for a company that filed for bankruptcy? The press release levels some pretty serious allegations: "RPGI has taken several actions to combat AG's unlawful activities, including pursuing litigation in the U.S. District Court in Chicago which is ongoing. This litigation revolves around AG's unlawful purchase of a majority interest in RPG's senior debt, in direct violation of a contractual obligation not to do so."

The investors said they believe that the interests of creditors, shareholders, employees and customers would be better served if Recycled Paper were allowed to pursue a restructuring as a stand-alone company.