9:32am PT by Alex Weprin
Deluxe Gets Court Approval for Prepackaged Bankruptcy
Deluxe Entertainment Services Group, the Hollywood production services provider that had been backed by billionaire Ron Perelman, says that it has received court approval for its prepackaged Chapter 11 plan of reorganization. The company now plans to complete its restructuring and emerge from Chapter 11 bankruptcy.
After emerging from Chapter 11, Deluxe says it will have reduced its long-term debt by more than half, and will have access to $115 million in new financing “to support its ongoing operations and investments.”
In September, Deluxe’s lenders agreed to a debt for stock swap, and earlier this month the company said that the best way to implement the exchange was through a court-supervised process, leading to the prepackaged bankruptcy.
Once the restructuring is complete, the company’s lenders will have control of the firm, which also owns postproduction companies EFILM, Company 3 and Encore, as well as VFX house Method.
Deluxe CEO John Wallace says that once the company emerges from Chapter 11, it “will be in its strongest financial position in more than a decade.”
Deluxe was founded in 1915 by William Fox, and was acquired by Perelman’s MacAndrews & Forbes holding company in 2006.
As the company’s financial needs hit a tipping point, however, MacAndrews & Forbes opted to discontinue its support, releasing a statement in August declaring that it “decided not to participate in the refinancing,” leading to the restructuring.