Party City exited bankruptcy on Wednesday after a US judge signed off on the retailer's reorganization plans.

The plan cancels nearly $1 billion of Party City's debt, and while some of Party City's nearly 800 US stores will close due to the bankruptcy agreement, the majority will stay open, according to the company. In a statement, Party City said it had renegotiated many of its leases and exited "less productive locations." That means many of Party City's workers will stay employed. The company had approximately 6,400 full-time and 10,100 part-time workers as of 2021.

"With our debt substantially reduced and Party City store portfolio optimized, we will emerge better positioned to advance our strategic priorities, continue to innovate and elevate the consumer experience, and pursue new growth opportunities," Brad Weston, the company's CEO, said in a statement.

However, those who held Party City's stock did not fare as well in the bankruptcy agreement. Party City's outstanding stock will be wiped out as part of the plan, and shareholders will not be reimbursed, according to the bankruptcy agreement.

Party City, the largest party supply store in the US, filed for bankruptcy in January after struggling to pay off its $1.7 billion debt load. The company, which sells balloons, Halloween costumes, and other party goods, had stumbled in the face of growing competition from e-commerce sites and pop-up concepts like Spirit Halloween. The company reported losses every year from 2019 to 2022.

An August filing by Party City's financial adviser, Moelis & Co., estimated that the retailer is currently worth between $450 million and $775 million.