(Bloomberg) -- Deluxe Entertainment Services Group Inc. filed for bankruptcy with a plan to cut its nearly $1 billion debt load in half, raise $115 million in fresh capital and hand ownership to its creditors.
The media company controlled by billionaire Ronald Perelman’s MacAndrews & Forbes LLC filed for Chapter 11 protection in the Southern District of New York, listing liabilities between $1 billion and $10 billion. A majority of its senior lenders had already agreed to swap the existing loans for a 100% stake in Deluxe.
The two sides agreed that the best way to execute the transaction was through a court-supervised proceeding. The company is in the process of gathering votes to get consent its proposed reorganization, which would still need the court’s approval.
The company is envisioning a relatively swift tour through bankruptcy court, with Deluxe asking for an Oct. 24 confirmation hearing.
“This process will allow us to strengthen our balance sheet and gain the financial flexibility and resources to drive investment in key growth strategies with no disruption to our business and no impact to our employees, customers, vendors and other business partners,” Chief Executive Officer John Wallace said in a statement.
Deluxe had considered spinning off its creative services business and using the proceeds to ease its debt burden. It dropped that plan in favor of a $73 million capital infusion agreed to by most of its lenders, Bloomberg reported in July.
Deluxe is headquartered in New York and Los Angeles, with operations in 38 markets worldwide and a staff of more than 7,500. It’s a video creation and distribution company whose services include delivering content, creating visual effects, and offering post-production and 2D-3D conversion, according to its website.
Kirkland & Ellis LLP is legal counsel for the company, and PJT Partners Inc. is the financial adviser. FTI Consulting Inc. is advising a majority group of its senior lenders, and Stroock & Stroock & Lavan LLP is providing legal advice.
The case is Deluxe Entertainment Services Group Inc., 19-23774, U.S. Bankruptcy Court for the Southern District of New York (White Plains)
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