Party City bankruptcy filing comes with $150 million for restructuring – USA TODAY

Celebration retailer Party City has filed for bankruptcy to cut costs, the company announced Tuesday in a news release.
The company filed for relief in the U.S. Bankruptcy Court for the Southern District of Texas, the release said. The move is part of an attempt to restructure and reduce the company’s debt.
Party City’s companies outside of the U.S., as well as its franchise stores and Anagram business are not part of the bankruptcy filing but are still part of the Party City enterprise.
The company currently has more than 800 Party City stores in over 45 states throughout the country and also runs a website for online shopping. 
Party City’s CEO Brad Weston said in the release that the pandemic and a global supply chain crisis were factors in the bankruptcy filing.
“As we take this important step to put our business on stronger financial footing for the future, we are as committed as ever to inspiring joy by making it easy for our customers to create unforgettable memories,” he said in the release. 
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The company in a news release also listed multiple changes to Party City’s business strategy, including:
But 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.
Party City said in an FAQ 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.”
Saleen Martin is a reporter on USA TODAY’s NOW team. She is from Norfolk, Virginia – the 757 – and loves all things horror, witches, Christmas, and food. Follow her on Twitter at @Saleen_Martin or email her at sdmartin@usatoday.com.

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