Anagram, Party City’s balloon-manufacturing subsidiary, filed for bankruptcy with a deal to hand over ownership to a group of bondholders after its parent company rejected its supply contract, WSJ Pro Bankruptcy reported. The credit bid by Anagram bondholders, which would extinguish a large portion of the company’s debt, is subject to higher and better offers in an auction supervised by the bankruptcy court. Anagram, which has a separate board and employees from Party City, has come under pressure from the lingering effects of the COVID-19 pandemic, helium shortages, a liquidity crunch because of cash distributions to its parent company and Party City’s recent move to reject its supply contract, according to a court filing made by its chief restructuring officer, Adrian Frankum. Party City itself filed for bankruptcy in January, emerging from it last month. It kept its balloon-making division out of chapter 11 because the retailer had separated its own debt from the debt of the subsidiary in a 2020 debt exchange. Eden Prairie, Minn.-based Anagram has lined up a $22 million debtor-in-financing loan from the bondholder group that has proposed to take over the unit.
