We advised an ad hoc group of first-lien noteholders in connection with Party City’s chapter 11 proceedings

Davis Polk advised an ad hoc group of first-lien secured noteholders in connection with the chapter 11 restructuring of Party City Holdings Inc. and certain of its subsidiaries. On January 17, 2023, Party City filed voluntary chapter 11 petitions in the United States Bankruptcy Court for the Southern District of Texas. In connection with the chapter 11 filing, members of the ad hoc group backstopped a $150 million new money DIP financing loan. The bankruptcy court confirmed Party City’s plan of reorganization on September 6, 2023, and on October 12, 2023, Party City emerged from bankruptcy.

The restructuring deleveraged Party City by approximately $1 billion, and Party City emerged with a new exit ABL facility of approximately $562 million and a $75 million new money investment, fully backstopped by members of the ad hoc group to fund go-forward operations and distributions under the plan of reorganization.

Based in New Jersey, Party City is a global leader in the celebrations industry, with its offerings spanning more than 70 countries around the world. Party City is also the largest vertically integrated designer, manufacturer, distributor, and retailer of party goods in North America.

The Davis Polk restructuring team included partners Damian S. Schaible and Adam L. Shpeen, counsel Jon Finelli and Robert (Bodie) Stewart and associate Abraham Bane. The litigation team included partner Elliot Moskowitz. The corporate team included partner Brian Wolfe. The capital markets team included partner Dan Gibbons. Partner Patrick E. Sigmon and counsel Leslie J. Altus provided tax advice. All members of the Davis Polk team are based in the New York office.