Deluxe Entertainment, the debt-burdened post-production services company, filed a prepackaged bankruptcy on Thursday, as it seeks to hand over the company to its debtholders.
The company announced last month that it had reached a debt-for-equity swap agreement with a majority of its lenders. At the time, the company hoped to avoid a bankruptcy filing by persuading all lenders to participate.
In a statement on Thursday, the company said all parties agreed that a “controlled, efficient, Court-supervised process” is the best way to achieve the exchange. The company has been owned by MacAndrews & Forbes, Ron Perelman’s holding company, since 2006. According to the company, the Chapter 11 filing will not affect employees and customers, and business will continue as usual.
“We have been working to put Deluxe in a strong financial position, and these steps are the best and most efficient way to finalize and implement the comprehensive financial restructuring,” said CEO John Wallace in a statement. “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.”
A first-day hearing was set for Friday in bankruptcy court in White Plains, N.Y.
In the filing, the company claimed debts between $1 billion and $10 billion, and assets between $500 million and $1 billion. The company’s biggest unsecured creditor is Skadden, Arps, Slate, Meagher & Flom LLP, which is owed $9,160,570.