Classic Party Rentals announced that the U.S. Bankruptcy Court for the District of Delaware has approved all of the First Day Motions related to its voluntary chapter 11 process initiated February 13, 2014. These motions collectively will enable the company to continue operating its business as usual as it completes its chapter 11 case.
Among the approved motions, the Court granted Classic access to $20 million in debtor in-possession financing. This financing, in addition to Classic’s existing resources, will ensure the company is able to continue meeting all of its financial obligations while the Company is in chapter 11.
The Court also approved client and employee motions giving Classic authority to honor all of its client and employee commitments in the ordinary course of business, including, pay employee wages and benefits as usual throughout the chapter 11 process, such as health and medical benefits, paid time off, and expense reimbursement.
Classic previously announced on February 14, 2013, that it has signed an agreement through which substantially all of the business of Event Rentals, Inc. and its subsidiaries, d/b/a Classic Party Rentals, would be acquired by a newly established entity owned by the company’s current lenders. Classic’s lenders have a deep understanding of the business and are fully supportive of the critical initiatives that the Company intends to implement in the short and long term. Classic plans to immediately investment in the business to refresh and grow inventory, which will expand the Company’s ability to deliver even more creative and elaborate events for its clients.
To facilitate the sale transaction, Classic Party Rentals announced on February 13 that the Company filed voluntary petitions for relief under chapter 11 of the United States Bankruptcy Code. As part of the sale transaction through chapter 11, the agreement is subject to a court-supervised process that will solicit additional offers for Classic Party Rentals to ensure the company achieves the highest and best offer for its business. Classic Party Rentals will evaluate any competing offers it may receive, and any competing offer accepted would only improve upon the current agreement with lenders.
The transaction is subject to the approval of the Bankruptcy Court and the satisfaction of customary closing conditions. The sale transaction is expected to be completed by the end of May 2014. Upon completion, Classic Party Rentals will be financially and operationally stronger – with more extensive product and service capabilities and outstanding customer service.