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

Davis Polk is advising 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. Shortly before the filing, the ad hoc group executed a restructuring support agreement with Party City, which, among other things, contemplates a $150 million new money DIP financing loan backstopped by members of the ad hoc group.

The DIP financing, which was approved on an interim basis by the Bankruptcy Court at Party City’s “first day” hearing held on January 18, 2023, will provide ongoing liquidity for Party City’s chapter 11 cases.

As of January 17, 2023, the ad hoc group held more than 70% of Party City’s $750 million first-lien fixed-rate notes and $161.7 million first-lien floating-rate notes.

Based in New Jersey, Party City is a global leader in the celebrations industry, with its products sold in more than 70 countries. Party City is the largest vertically integrated manufacturer, retailer of party goods and Halloween specialty retail chain in the North America.

The Davis Polk restructuring team includes partners Damian S. Schaible and Adam L. Shpeen, counsel Jon Finelli and associates Jonah A. Peppiatt, Gene Goldmintz, Timothy H. Oyen, Alexander K.B. Shimamura and Abraham Bane. The litigation team includes partner Elliot Moskowitz. Partner Patrick E. Sigmon is providing tax advice. All members of the Davis Polk team are located in the New York office.

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