Following the news this week that Party City has filed for Chapter 11 bankruptcy, the retailer has reportedly been given provisional court permission to pay suppliers and other vendors deemed critical to its operations.
After filing for Chapter 11 on Tuesday, Party City filed for permission on Wednesday, to spend $12.7 million to pay key domestic and international vendors, as well as lien holders and other trade creditors.
In total, Party City expects to pay $74 million to its critical vendors over the course of its bankruptcy.
Recently published court papers show that Party City is keen to achieve continuity in its offering, in order to be able to serve consumers. The retailer said that even a temporary interruption to supply would lead to ‘noticeable gaps’ on its shelves.
Under the supervised process of Chapter 11, where payments and debts are regulated, Party City must seek court approval to distribute payments to critical vendors.
To read the full story, click here.
