Deluxe receives U.S. court approval for bankruptcy plan

The post-production firm says the approval will allow it to reduce its long-term debt by half and gain access to around USD$115 million in new financing.

Deluxe imageDeluxe Entertainment Services Group has received approval from a U.S. court to move ahead with its bankruptcy reorganization plan. With the approval, the California-based post-production firm says it can now complete its financial restructuring, reduce its long-term debt by more than half and gain access to around USD$115 million in new financing.

As proposed earlier this month, the plan gives control of the company to its creditors and will allow Deluxe to emerge from bankruptcy.

“This is an important milestone for Deluxe — we have a strengthened balance sheet and new capital to continue our investments in services and technology,” said Deluxe CEO John Wallace in a statement. “Deluxe will be in its strongest financial position in more than a decade, with the resources to lead the industry into the future.”

Headquartered in L.A. and New York, Deluxe has operations in 38 markets and a global work force of around 7,500. The company also has significant operations in Canada, employing around 1,100 employees across its creative and distribution businesses.

Earlier in the month, the company said that its day-to-day operations would continue without interruption – and with no impact on employees, customers and vendors  throughout the financial restructuring process.

Deluxe’s financial troubles first came to light over the summer, when it proposed a debt-for-equity deal with the majority of its investors. A report from from financial services company Moody’s Investors Service said a downturn in widely released feature films, declines in Blu-ray and DVD sales and delays of key film projects contributed to the company’s fiscal challenges.