Party City Investors Advance Deception Suit Against Ex-Leaders

Party City Holdco Inc. investors can proceed with securities fraud claims against two of the defunct retailer’s executives for signing off on an SEC filing that mischaracterized the company’s finances, a federal court ruled.

The proposed class action adequately alleged material misrepresentations in the form’s declaration in September 2022 that Party City’s available funds would be adequate to meet its liquidity needs for the next 12 months, Judge Julien Xavier Neals said Monday for the US District Court for the District of New Jersey. Neals rejected the former executives’ request for dismissal.

Party City isn’t a defendant in the suit ...