Party City Holdco Inc. announced Oct. 12 that it completed its restructuring process and emerged from Chapter 11 “financially stronger and well positioned for the future.” 

Additionally, the Woodcliff Lake-based company said Chief Executive Officer Brad Weston would step down, effective Nov. 3. Sean Thompson, currently the company’s president and chief commercial officer, will take over as interim CEO at that time. 

PCHI filed for bankruptcy protection in January in an effort to restructure its debt. In February, it began auctioning off store leases as part of those plans.  

In its latest announcement, the company said, “Through its restructuring, PCHI has substantially strengthened its capital structure by eliminating nearly $1 billion in debt, enhanced its liquidity, and optimized its Party City store portfolio by having negotiated improved lease terms and exited less productive stores.” 

The company added it will “move forward” with nearly 800 stores across the U.S. As NJBIZ reported, Party City had about 820 stores, owning 770, when it filed for bankruptcy. It also had about 50 franchise locations in the U.S., Mexico and Puerto Rico. 

Under the company’s reorganization plan, which was approved by the U.S. Bankruptcy Court for the Southern District of Texas Sept. 6, Party City emerged with a new exit-based loan of $562 million and a $75 million new money investment to fund operations and distributions plan.  

Additionally, the company’s new shareholders include the members of the ad hoc group of holders of the company’s prepetition senior secured first lien notes who supported the restructuring. 

“We are thrilled to celebrate the successful conclusion of our restructuring and the bright future that lies ahead for PCHI,” Weston said in a statement. “We have exited the process on stronger financial footing, and I am incredibly appreciative of the tremendous efforts made by our team to get us to where we are today.” 

Weston added that “the timing was right to pass the baton” to Thompson. 

“I’m confident [Thompson] will build on the significant strides that have been made as PCHI continues to expand its market leadership and enhance the customer experience.” 

Paul, Weiss, Rifkind, Wharton & Garrison LLP served as legal counsel, Moelis & Company LLC served as investment banker, AlixPartners, LLP served as financial advisor, and A&G Realty Partners served as real estate advisor to Party City. 

Davis Polk & Wardwell LLP served as legal counsel and Lazard Frères & Co. served as investment banker to the Ad Hoc Group.