Party City files for Chapter 11 with $150 million DIP loan from bondholders

Party City Holdco Inc.
PRTY,
+7.19%
filed for Chapter 11 bankruptcy protection late Tuesday in the U.S. Bankruptcy Court for the Southern District of Texas, according to a regulatory filing. The company has a debtor-in-possession, or DIP loan, of $150 million to enable it to continue operations while it reorganizes. The company has a pre-arranged restructuring support agreement with a bondholder group that holds more than 70% of the company’s senior debt. “In the face of pandemic headwinds, a global supply chain crisis, and other macroeconomic challenges that have faced our industry, we have made significant strides in PCHI’s ongoing transformation – establishing a solid foundation for long-term growth and continued success as the market leader in the celebrations space,” said CEO Brad Weston in a statement. The restructuring is expected to be completed in the second quarter. In the meantime, the company’s more than 800 stores remain open ,as well as its website.