Party City Nears Bankruptcy, May Hand Reins to Creditors (1)

Party City Holdco Inc. is laying the groundwork for a bankruptcy filing within weeks that may end with creditors taking ownership of the retailer, according to people with knowledge of the situation.

The company will likely miss a coupon payment due in mid-February and could seek reprieve from its creditors to negotiate a restructuring, according to the people, who asked not to be identified because the matter is private.

A creditor group that includes Capital Group Cos Inc. and Silver Point Capital is having restructuring talks ahead of the potential filing, according to the people. The firms have sizable ...