Party City files for bankruptcy as part of $150 million agreement to restructure business

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Party City's CEO Brad Weston said the pandemic and a global supply chain crisis were factors in the bankruptcy filing.

The company in a news release also listed multiple changes to Party City's business strategy, including:Evolving Halloween City pop-up storesBut the biggest stride the company noted is an agreement with the majority of its senior secured noteholders called the Ad Hoc Group. The group has promised $150 million in debtor-in-possession financing that will support the company's restructuring, Party City said.

The move will help the company complete an"expedited restructuring" to reduce its debt that should be done by the second quarter of 2023. The company has also asked the court for permission to maintain"business-as-usual operations" such as paying wages and providing benefits to employees. The money will also help Party City continue to honor customer programs such as store credits, special offers and promotions. Policies for returns, exchanges and refunds won't be impacted, the company said.that wholesale customers can expect normal delivery of orders.

"We will operate as usual and our supplier relationships will remain essential," the company said."Suppliers will be paid in the ordinary course for all authorized goods received and services provided after the filing date."

 

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