By Dietrich Knauth
A U.S. bankruptcy judge on Wednesday approved Party City Holdco's Chapter 11 bankruptcy plan, which will cancel about $1 billion in company debt and turn all of its equity value over to the retailer's lenders.
U.S. Bankruptcy Judge David Jones approved the deal at a court hearing in Houston, while acknowledging the poor outcome for individual shareholders whose shares will be wiped out. Party City simply could not repay all of its $1.4 billion in pre-bankruptcy debt and have money left over for shareholders, according to the judge.
"The math is what the math is," Jones told a shareholder who spoke up at the hearing. "It's one of those things where there simply is not an alternative."
Party City is estimated to be worth between $450 million and $750 million, the company's financial adviser Moelis & Co said in an Aug. 31 court filing.
(Reporting by Dietrich Knauth in New York and Granth Vanaik in Bengaluru; Editing by Nick Zieminski)
