ArticleOn December 21, 2024, Party City Holdco Inc. and certain of its subsidiaries initiated voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the Southern District of Texas to accomplish an orderly wind down of its business. The bankruptcy court authorized Party City to commence going out of business sales at its approximately 700 stores nationwide, which the company expects to take place over a 10-to-12-week period.
The bankruptcy court also approved bidding procedures in connection with the sale, liquidation, or other disposition of certain of the debtors’ assets. The company intends to utilize the bidding procedures for multiple auctions, notice of which will contain, among other things, (a) the relevant dates and times, including the dates by which (i) all bids must be received by the debtors, (ii) the auction will occur, (iii) a party must file and serve a written objection, if any, to the sale, transfer, proposed assumption and assignment (including the debtors’ proposed related cure amounts), and/or to the successful bidder’s proposed form of adequate assurance of future performance, (iv) the bankruptcy court will hear the applicable proposed sale, and (v) the debtors’ and successful bidder anticipate consummating the transfer or sale under the terms of the applicable agreement; and (b) a list of assets to be sold.
While the debtors have sought to reject some of their real property leases, the company hopes to monetize its lease portfolio through the sale process. Landlords are permitted to participate in the auction process and may credit bid all or a portion of the applicable cure costs.