(Reuters) – Oriental Trading Co, owned primarily by private equity firms Carlyle Group and Brentwood Associates, filed for bankruptcy on Wednesday, citing a heavy debt load and declining sales.
The retailer of party and hobby supplies has reached a prearranged plan with some lenders which would help it cut debt by 70 percent.
Oriental Trading has agreed to give first lien lenders 100 percent of the reorganized company and a new term loan of $200 million, in exchange for the $404 million in claims that they hold.
Some lenders have also agreed to provide $40 million in debtor-in-possession financing, to help fund operations while the company reorganizes.
The deals are subject to bankruptcy court approval.
Oriental Trading listed assets in the range of $100 million to $500 million. It said it had liabilities of $500 million to $1 billion.
The company calls itself the largest U.S. direct marketer and Internet marketer of party supplies and children’s arts and crafts. It was founded in 1932 in Omaha, Nebraska, where its executive offices are still based.
The case is In re OTC Holdings Corp, U.S. Bankruptcy Court, District of Delaware, No: 10-12636.
(Reporting by Chelsea Emery and Santosh Nadgir; Editing by Gerald E. McCormick and Richard Chang)
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