NEW YORK (Reuters) - Deluxe Entertainment Services Group Inc, a video services company backed by the billionaire financier Ronald Perelman, filed for bankruptcy Thursday, as part of a restructuring that will hand control of the company to its lenders.
The Burbank, California-based company said its Chapter 11 restructuring will reduce long-term debt by more than half, raise $115 million of new financing and have no impact on day-to-day operations.
Founded in 1915, Deluxe makes visual effects for Hollywood movies and television shows. It had been owned since 2006 by Perelman’s MacAndrews & Forbes holding company.
Moody’s Investors Service said in August that Deluxe had been struggling with negative cash flows because fewer movies were entering wide release, some movies were being shelved and DVD and Blu-ray sales and prices were falling.
Deluxe said it will ask a federal bankruptcy judge in White Plains, New York to approve its restructuring on Oct. 24.
It reported between $500 million and $1 billion of assets and more than $1 billion of liabilities in its bankruptcy petition.
Reporting by Jonathan Stempel in New York; Editing by Cynthia Osterman