Party City set to exit bankruptcy with $1 billion debt reduction (updated)

Party City Holdco

06/09/2023 20:46

(Adds quote from judge, recasts headline)
    By Dietrich Knauth
       Sept 6 (Reuters) - A U.S. bankruptcy judge on Wednesday
approved Party City Holdco's Chapter 11 bankruptcy plan, which
will cancel about $1 billion in company debt and turn all of its
equity value over to the retailer's lenders.
        U.S. Bankruptcy Judge David Jones approved the deal at a
court hearing in Houston, while acknowledging the poor outcome
for individual shareholders whose shares will be wiped out.
Party City simply could not repay all of its $1.4 billion in
pre-bankruptcy debt and have money left over for shareholders,
according to the judge. 
  
        "The math is what the math is," Jones told a shareholder
who spoke up at the hearing. "It's one of those things where
there simply is not an alternative."
  
        Party City is estimated to be worth between $450 million
and $750 million, the company's financial adviser Moelis & Co
said in an Aug. 31 court filing.
  

 (Reporting by Dietrich Knauth in New York and Granth Vanaik in
Bengaluru
Editing by Nick Zieminski)
 ((Granth.Vanaik@thomsonreuters.com; Twitter: https://twitter.com/Vanaik_Granth;))