• Deluxe Media Services files for Chapter 11 Bankruptcy
• Bankruptcy plan is assumed to reduce the long-term debt load by more than half
• Media Company is set to receive $115 million of new financing
On October 3, 2019, Deluxe Entertainment Services Group Inc., a US-based post-production giant, filed for Chapter 11 bankruptcy with a plan to cut its nearly $1 billion debt load in half. The Group seeks to hand over the company to its debtholders and raise $115 million in new financing, the company said.
“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 Deluxe Chief Executive 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.”
Deluxe – the world’s leading video creation to distribution company offering global, end-to-end services and technology is backed by billionaire Ronald Perelman’s MacAndrews & Forbes LLC. With headquarters in Los Angeles and New York and operations in 38 countries, the company employs more than 7,500 of the industry’s premier artists, experts, engineers, and innovators.
Deluxe confirmed that their only aim is to swap the company’s debt for equity. “Deluxe’s day-to-day operations will continue without interruption, with no impact on employees, customers, and vendors,” said a company press release.
The debt-for-equity exchange process is now under a Court-supervision. Deluxe has requested a hearing date of October 24, 2019, to approve the Plan and expects to implement the transaction shortly thereafter.