Party City Settles Employee Layoff Class Action in Bankruptcy

Party City Holdco Inc. agreed to a nearly $4 million settlement with former employees who were abruptly laid off last year as the party supply retailer headed into bankruptcy and announced it was going out of business.

Party City will grant priority claims of $10,100 to each of the 394 corporate headquarters employees who joined in litigation against the company and individual defendants right after it filed its second Chapter 11 case in December. The deal, laid out in papers filed Aug. 22 in the US Bankruptcy Court for the Southern District of Texas, also includes confidential insurance policy payments ...