(Bankr, News & Analysis) Party City Holdco Inc. is seeking bankruptcy court approval for two separate agreements to sell designation rights for its store leases to Five Below Inc. and Dollar Tree Stores Inc., as the retailer continues its restructuring efforts.
In filings with the U.S. Bankruptcy Court for the Southern District of Texas (Case No. 24-90621), Party City outlined plans to transfer lease designation rights for 44 locations to Five Below and 148 locations to Dollar Tree. The agreements would allow both retailers to evaluate and potentially take over select Party City locations.
Under the Five Below agreement, Party City would receive $2 million upfront, plus $70,000 for each additional lease assignment over 29 leases. The Dollar Tree deal includes a $1 million base purchase price, with $65,000 for each lease assignment exceeding ten locations.
Both agreements include provisions for the buyers to cover certain carrying costs and March rent payments for designated locations. The deals have expiration dates in spring 2025, with Five Below’s rights expiring April 30 and Dollar Tree’s on March 31, with an option to extend to April 30.
Porter Hedges LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP are representing Party City in the bankruptcy proceedings. Emergency hearings on the motions are scheduled for February 26 and February 28, respectively.
The retailer, which filed for Chapter 11 protection in December 2024, is working to maximize value for its estate through these strategic lease transactions.
This article was prepared using Stretto Conductor, our new AI-powered assistant that’s here to help. Stretto Conductor was able to create this summary of multiple court filings in less than a minute. Always review the underlying docket filings for accurate information. The information and responses generated by Stretto Conductor may contain errors or inaccuracies and should not be relied upon as a substitute for professional or legal advice.
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