Envelope 1 Lawsuit: USDA Loan Default, Foreclosure, and Chapter 11

The Envelope 1 lawsuits are a group of 2025 creditor actions against the Columbiana, Ohio envelope manufacturer and its affiliates, including a $25 million loan default claim by U.S. Eagle Federal Credit Union, two foreclosure judgments totaling roughly $8.6 million, and several smaller breach-of-contract suits. They culminated in the company’s Chapter 11 bankruptcy filing on November 12, 2025, which listed $52.9 million in liabilities against $31.8 million in assets.¹

The $25 Million USDA-Backed Loan Default

The largest claim against Envelope 1 grew out of a 2022 expansion project. The company borrowed $25 million from U.S. Eagle Federal Credit Union of New Mexico at 6.5 percent interest over 30 years, with the U.S. Department of Agriculture guaranteeing the loan through its rural development program. The money funded a $28 million, 100,000-square-foot addition to the State Route 344 plant and was expected to create 122 new jobs.²

Roughly three years later, that loan was in default. U.S. Eagle sent a notice of default in January 2025, and when Envelope 1 did not cure within the time allowed, the credit union filed suit on July 14, 2025, alleging the company owed the full $25 million.³

Nubridge Foreclosure on the Columbiana Plant

The first public sign of trouble came two months earlier. In May 2025, Nubridge Commercial Lending LLC won a judgment in Columbiana County Common Pleas Court against Pidgeon Envelope LLC and Sharon Pidgeon. Judge Megan Bickerton found that Pidgeon Envelope had defaulted on a promissory note and loan guarantee, and set the principal owed at roughly $4.08 million. With 14.99 percent interest, the total judgment came to approximately $4.4 million, and the court ordered foreclosure of the main plant at 41969 State Route 344 in Columbiana if the debt was not paid.⁴

The default itself stemmed from a missed extension payment due February 1, 2025, followed by a failure to pay off the debt by a March 31, 2025 deadline. The court granted a 90-day extension, but Pidgeon Envelope did not meet its terms, and by August 2025 a sheriff’s sale appeared imminent. CEO Tarry Pidgeon told reporters the sale was “not happening,” said the company had secured financing to satisfy the debt, and said the plant was operating normally.³

Equify Financial Judgment and the Salem Property Sale

A separate Columbiana County case brought by Equify Financial LLC produced a judgment against a broader set of defendants: Salem Real Properties LLC, Envelope 1 Inc., Pidgeon Envelope LLC, E1 Digital Direct, Sharon Pidgeon, and Tarry Pidgeon. The court held them jointly and severally liable for $4,248,532 and ordered foreclosure on a property at 964 Benton Road in Salem.⁵

That foreclosure actually went through. In April 2026, the court authorized a court-appointed receiver to sell the Benton Road property to Process Equipment Inc. for $3 million.⁶

Other Creditor Suits and Unpaid Taxes

Several other creditors sued Envelope 1 and its affiliated entities during 2025:

Onset Financial filed a contract claim in Utah federal court in January 2025 against E1 Digital Direct, Envelope 1, Sharon Pidgeon, and Tarry Pidgeon. On December 1, 2025, the court entered a default judgment of $749,892.50 against E1 Digital Direct and the Pidgeons jointly and severally. Envelope 1 itself was voluntarily dismissed without prejudice because of its bankruptcy filing.⁷
Quarterback Transportation filed a breach-of-contract suit in the Northern District of Ohio against Pidgeon Trucking LLC and Envelope 1 in April 2025. The case was terminated in July 2025, though post-termination filings included writs of execution involving two banks.⁸
Gordon Paper Company filed a complaint in the Northern District of Ohio on June 17, 2025, and moved for default judgment in October 2025 after Envelope 1 apparently failed to respond.⁹
Cloudfund LLC filed a separate action naming Envelope 1, E1 Digital Direct, Tarry Pidgeon, and Sharon Pidgeon as defendants and sought entry of judgment.¹⁰

WKBN also reported that other unnamed lenders claimed Pidgeon had defaulted on loans with them, and the Columbiana County Auditor’s Office listed roughly $18,128 in unpaid property taxes on the State Route 344 facility.³

Chapter 11 Bankruptcy and Current Status

Envelope 1 filed a voluntary Chapter 11 petition on November 12, 2025 in the U.S. Bankruptcy Court for the Southern District of Florida, West Palm Beach division, before Judge Mindy A. Mora.¹¹ The petition reported $52.9 million in total liabilities against $31.8 million in total assets.¹

The day after the filing, Tarry Pidgeon confirmed the bankruptcy and said the company would continue operating under Chapter 11 reorganization. He acknowledged that employees had been receiving late paychecks and said court approval was required before the company could release payroll funds. “Paychecks could be going out at any time now,” he told WKBN.¹² Employees had separately told local news that their health benefits may also have been affected.⁴

The bankruptcy remains active. The creditor claims deadline was set for May 11, 2026.¹³ Envelope 1 filed a Chapter 11 plan and disclosure statement in May 2026, and monthly operating reports were still being filed as recently as June 2026.¹¹

1
Bondoro. Envelope 1 Filing Alert
2
Business Journal Daily. Envelope 1 Gets Loan for $28M Expansion
3
WKBN. Judgment Orders Sheriffs Sale of Columbiana Business Property
4
Morning Journal News. Envelope One Facing Sheriffs Sale
5
Salem News. Common Pleas Court
6
Morning Journal News. The Courts
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PACER Monitor. Onset Financial v Envelope 1 et al
8
PACER Monitor. Quarterback Transportation Inc v Pidgeon Trucking LLC et al
9
CourtListener. Gordon Paper Company Inc v Envelope 1 Inc
10
Trellis Law. Notice Entry Judgment in Cloudfund LLC v Envelope 1 Inc
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BKData. Envelope 1 Inc Bankruptcy Filing
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WKBN. Envelope 1 Owner Says Paychecks Are Coming Business Will Recover
13
JAG Corps Bankruptcy. Envelope 1 Inc Bankruptcy Notice