Party City is preparing to file for bankruptcy as soon as this month

On December 21, 2024By Littum

(Bloomberg) — Party City Holdco Inc. plans to file for bankruptcy, possibly within the next two weeks, in a process that could lead to the liquidation of its stores, according to people with knowledge of the matter.

The timing of a filing is still in flux and plans could change, said the people, who asked not to be identified because they were discussing a private matter.

The New Jersey-based seller of balloons and party supplies is strapped for cash and unable to pay rent at some locations, Bloomberg previously reported. It would be the second time in less than two years that Party City has sought bankruptcy protection, hit by years of delayed sales that made its debt burden unbearable.

Lenders including Silver Point Capital took ownership of Party City when it exited Chapter 11 protection in October 2023, reducing its debt by about $1 billion and closing more than 60 stores. But emerging from bankruptcy with more than $800 million in debt still in place has continued to drag down profits and strain Party City’s cash flow.

A representative for Silver Point declined to comment, and a representative for Party City did not immediately respond to requests for comment.