When people in Tennessee or throughout the country host special occasions for family and friends, they often purchase supplies and decorations from Party City. Prior to 2020, the party supply mogul was a multi-billion-dollar business. Since then, a financial crisis has hit the company; however, customers will still be able to meet their party needs by shopping there because the owners have filed for Chapter 11 bankruptcy.
Chapter 11 bankruptcy has saved many businesses from going under. The program has several benefits, including an automatic stay against collections, foreclosures and repossessions. Filing for this type of debt relief also enables stores to stay open for business while debt repayment plans are restructured.
Chapter 11 bankruptcy enabled Party City to obtain funds to pay workers
Company representatives have cited big box stores and national economic woes as reasons for reduced revenue in recent years. Officials at Party City are seeking approval from a U.S. Bankruptcy Court to use funds acquired through a $150 million bankruptcy loan to pay its employees. The money would also enable the company to pay its vendors and cover numerous other operating expenses.
Out of 823 stores nationwide, Party City leases 28 of them and owns the others. As part of its Chapter 11 bankruptcy plan, store owners have asked the court to allow them to be released from their rental agreements and to consider closing several of the stores they own. Every business owner faces unique challenges when trying to overcome a serious financial crisis. To increase the chances of getting things back on track by applying for debt relief, it is helpful to ask an experienced bankruptcy law attorney to review one’s case and make recommendations as to which program best fits the company’s needs.