Party City, which has faced significant challenges since the onset of the COVID-19 pandemic
Party City has filed for Chapter 11 bankruptcy protection in the United States for the second time in two years, as it intends to cease its retail and wholesale operations. The retailer, established for over four decades and known for offering a wide range of party supplies, including themed decorations and holiday costumes, announced that all of its 700 stores across the nation will remain operational while it initiates a liquidation sale.
The company, along with certain subsidiaries, submitted its Chapter 11 filing to the U.S. Bankruptcy Court for the Southern District of Texas. In its court documents, Party City Holdco reported assets and liabilities estimated between $1 billion and $10 billion, with more than 10,000 creditors.
According to a statement from the Woodcliff Lake, New Jersey-based company, senior lenders will provide the necessary financial support to sustain operations throughout the winding-down process.
Retailers in distress frequently pursue bankruptcy protection during the holiday season to capitalize on potential cash flow from recent sales.
Party City, which operates both physical stores and an online platform, indicated that it plans to retain the majority of its 12,000 employees during the liquidation period to facilitate the wind-down process.
The company initially filed for Chapter 11 bankruptcy protection in January of the previous year. Later that year, it successfully implemented a plan to exit bankruptcy, which included the cancellation of approximately $1 billion in corporate debt.
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