Party City has exited bankruptcy with nearly 800 stores.
Party City Holdco Inc. has completed its restructuring and emerged from Chapter 11 bankruptcy.
In connection with the restructuring, CEO Brad Weston said he will resign on Nov. 3. Sean Thompson, currently president and chief commercial officer, will serve as interim CEO. Weston has led Party City since July 2019. Prior to that, he was CEO of Petco.
Party City filed for bankruptcy in January amid lower sales, ongoing supply problems and a liquidity problems. In September, the U.S. Bankruptcy Court for the Southern District of Texas approved the company’s restructuring plan, which “substantially strengthened its capital structure by eliminating nearly $1 billion in debt, enhanced its liquidity and optimized its Party City store portfolio” by negotiating improved lease terms and closing less productive stores, Party City said in a statement.
The company will move forward with nearly 800 locations nationwide, after closing about 60 stores as part of the bankruptcy proceedings. Also as part of the approved plan, Party City’s equity value will be turned over to lenders who helped support its restructuring.
“Based on all that has been accomplished over the last several years – strategically, operationally, and financially – PCHI has emerged with an excellent foundation in place to drive long-term growth,” Weston said. “At this juncture, with the restructuring now behind us, the timing is right to pass the baton to Sean, who I’m confident will build on the significant strides that have been made as PCHI continues to expand its market leadership and enhance the customer experience.”
Under the company’s reorganization, Party City has emerged with a new exit ABL facility of $562 million and a $75 million new money investment to fund go-forward operations and distributions.
Paul, Weiss, Rifkind, Wharton & Garrison LLP served as legal counsel, Moelis & Company LLC served as investment banker, AlixPartners, LLP served as financial advisor, and A&G Realty Partners served as real estate advisor to the Company.
Davis Polk & Wardwell LLP served as legal counsel and Lazard Frères & Co. served as investment banker to the Ad Hoc Group.