I’m excited to launch a LinkedIn series with my friend Luke Hubbard, combining his interest in special situations with my passion for entrepreneurship and business solutions. Our first case study explores Party City’s collapse.

1. Party City changed hands between multiple private equity firms, Berkshire Partners, Advent, and THL, all of whom used heavy debt to fund buyouts and recapitalizations. By the time of its 2015 IPO, the company was carrying approximately $2.2B in debt against just $362M in adjusted EBITDA. That 6x leverage made the business inherently unstable and unable to invest in long-term resilience.

2. The 2005 merger with Amscan (a major supplier) seemed strategic, but it eventually limited Party City’s ability to source cheaper or more diverse goods. The locked-in supply chain reduced agility just as e-commerce giants like Amazon and omnichannel retailers like Target and Walmart scaled faster and smarter.

3. Party City aggressively grew its store count in the 2000s and 2010s, including seasonal Halloween City pop-ups. But it failed to optimize or right-size its footprint. In 2019, the company closed 45 stores, triple the normal annual number, and admitted many were profitable, just not viable under the weight of corporate overhead.

4. Balloons, especially helium-filled foil ones, were a major revenue and brand driver. But a global helium shortage in 2019 crushed sales. While a new supplier was secured, costs soared, and margins shrank. This commodity disruption had an outsized impact on Party City’s already weakened cash flows.

5. COVID-19 temporarily shut down all Party City stores and wiped out event-driven revenue. Shares collapsed to $0.31 in April 2020. Revenue fell over 21%, and EBITDA flipped to negative $123M. The company was already fragile, and COVID just pushed it to the edge faster. Many cyclical companies faced distress during the pandemic, including Carvana, Hertz, JCPenney, and Revlon, to name a few.

6. In mid-2020, Party City restructured $720M+ in debt out-of-court, creating a complex security structure involving a new unrestricted subsidiary backed by its Anagram balloon business. It reduced leverage by $558M and raised $90M in new capital, briefly reviving investor confidence. But it was a temporary fix, not a turnaround.

7. Despite rebounding in 2021, margins deteriorated again in 2022 due to rising labor, freight, and material costs. Party City posted a $20M Q1 operating loss and cut headcount by 19%. Even next-gen remodeled stores couldn’t offset poor performance. Halloween 2022, a critical sales season, was a major letdown.

8. After renewed negotiations with creditors, Party City filed a prepackaged Chapter 11 in January 2023. The restructuring, supported by 70% of creditors, wiped out approximately $1B in debt, included a $150M DIP loan, and allowed the company to reject leases, sell off underperforming units (like its Mexican business), and reorganize the core.

In this issue, Luke Hubbard and I cover private capital investments, including joint ventures and hybrid value investments.

Hertz:

1. Hertz became financially distressed when the COVID-19 pandemic sharply reduced travel demand and used car values, devastating both revenue and margins. With 65% of operations halted, revenue per unit dropped 34%, and utilization fell to 53%. At the same time, falling car values drove up vehicle costs. Already burdened with over $16.4 billion in debt and limited income, Hertz quickly ran out of cash, unable to meet upcoming obligations.

2. Recognizing the opportunity, Apollo Global Management had already anticipated distress by buying credit default swaps. During Hertz's distress, Apollo bought term loans at approximately 60 cents on the dollar, valuing the company at around $1 billion compared to its prior $10 billion market capitalization.

3. Apollo provided DIP financing, enabling Hertz to maintain operations during bankruptcy. They also played a critical role in refinancing $4 billion of used car vehicle debt during the collapse and acquired Hertz’s fleet finance platform, merging it with their existing Wheels platform. Apollo also supported Knighthead’s bid with $2.5 billion in preferred equity, ultimately exiting their position within six months at a 130% return. In total, Apollo deployed approximately $10 billion of capital across these stages.

Intel:

1. Intel had a bold vision and needed $22B to complete Fab 34 in Ireland. Intel was ready to bring $11B to the table but didn’t want to risk its investment-grade credit rating by piling on traditional debt. Enter Apollo, with a custom $11B joint venture solution.

2. Apollo bought 49% of a new JV that owned Fab 34. This JV sat between Intel’s chip designers and the factory, and Intel signed a long-term wafer purchase agreement, committing to buy chips over time. To Intel, this looked like equity, with no damage to its balance sheet. To Apollo, it felt like a secure credit play backed by Intel’s commitment, priced about 200–250 bps above Intel’s existing 5.5% bonds.

3. Why is this important? Intel avoided the typical 12–13% blended cost of raising capital and locked in Apollo’s lower 7–8% solution. Apollo got investment-grade returns in a structure that looked like equity but behaved like debt. The JV was eventually syndicated and rated IG.

In this issue, Luke Hubbard and I discuss Six Flags' bankruptcy. Part two, releasing on Sunday, will explore the Cedar Point merger and COVID-19's impact on the industry.

1. Six Flags was founded in 1961 by Angus G. Wynne, Jr., a Texas real estate developer who originally intended the park to be a short-term attraction in Arlington. The park exceeded expectations, drawing over 8,000 visitors on opening day and 17.5 million in its first decade. Drawing inspiration from Disneyland but tailored for local guests, Wynne introduced a distinctive flat-fee entry model.

2. The 1990s marked a transformative era. In 1993, Time Warner acquired the company and integrated Warner Bros. themes like Looney Tunes and Gotham City into the parks. In 1997, Six Flags completed Superman: Escape from Krypton, the first coaster to surpass the 400-foot mark. Roller coasters became more mainstream, and attendance soured across the industry. In 1998, Premier Parks purchased Six Flags for $1.86 billion and launched an aggressive acquisition campaign. Six Flags launched its "War on Lines" initiative in 1999, particularly at Six Flags Great Adventure. The park added over 20 new attractions, including roller coasters and flat rides, to reduce wait times by increasing ride capacity.

3. By the early 2000s, Six Flags was burdened with over $2 billion in debt from its aggressive 1990s expansion under Premier Parks. Seeing an opportunity, former Washington Commanders owner Dan Snyder launched a proxy battle in 2005 to take control of the board. His plan included outsourcing food to brands like Heinz and Papa Johns, and boosting revenue through higher parking fees and sponsorships.

4. After gaining control in 2005, Dan Snyder and CEO Mark Shapiro implemented their vision. While in-park spending increased, attendance dropped, especially as higher prices and reduced discounts alienated key demographics like teens. Cost-cutting led to scaled-back rides and attractions, and controversial moves, like seeking liquor licenses and poor handling of safety incidents, damaged the company’s image.

5. In June 2009, Six Flags sought bankruptcy protection through a prepackaged Chapter 11 filing. This decision was necessitated by its $2.7 billion debt burden. The company brought in a fresh infusion of capital. This included the issuance of over 54.7 million shares of new common stock (a total of 109.6M shares after the two-for-one stock splits in June 2011 and June 2013), with a portion going to former unsecured creditors and certain noteholders in exchange for their debt. Additional equity was raised through a $505.5 million rights offering and other purchases. Furthermore, Six Flags secured new financing, including an $890 million senior secured first lien credit facility and a $250 million senior secured second lien term loan facility.

In this issue, Luke Hubbard and I cover Six Flags' performance in the decade following its bankruptcy.

1. In 2010, Jim Reid-Anderson was named CEO and had a bold new strategy to turn the company around. Every park in the chain gets one lower-cost attraction to grow attendance, a new tiered membership system to provide steady passive income, and dining plans to incentivize guests to eat in the park.

2. From 2010 to 2016, Anderson’s plan proved successful as market value increased eightfold while attendance steadily went up. Anderson stepped down in 2016, and John Duffy took the helm. Duffy’s tenure only lasted a matter of months before Anderson was hired back as CEO. Anderson then led the company for two more years before retiring in 2019.

3. Mike Spanos became the next CEO, succeeding Anderson in late 2019. Unfortunately for Spanos, parks shut down due to COVID-19 one year after he started as CEO. These closures extended for several months, severely impacting their operational season. In 2020, around 3 million passholders and 900,000 members canceled their monthly plans due to uncertainty about when parks would reopen. Six Flags extended season passes and upgraded monthly fee-paying members to the next membership tier.

4. In another leadership shake-up, Spanos left in 2021, and Selim Bassoul became the new CEO. Bassoul immediately allocated capital to clean up the look of the parks, started new food festivals, and raised ticket/membership prices in an effort to bring in a wealthier clientele.

5. While park spending increased significantly in 2022, attendance decreased back to pandemic levels due to the higher membership costs. By 2024, Cedar Fair and Six Flags merged to create North America's largest amusement park operator, uniting 42 parks. Leadership transitioned entirely to Cedar Fair executives, with former Cedar Fair CEO Richard Zimmerman becoming CEO of the combined company and Six Flags CEO Selim Bassoul now serving as executive chairman.

6. Six Flags historically pursued a strategy of rapid expansion and often added numerous rides, including "cheap" or off-the-shelf attractions. Currently, their approach is more measured, with new rides introduced every two to three years, inconsistent across parks, and focused on better-performing locations. They are also actively selling off underperforming parks.

7. Six Flags and Cedar Fair both operate with high operating leverage, meaning they have substantial fixed costs like maintenance and rely heavily on strong attendance to drive profitability. Their business model allows for high margins during periods of high attendance but creates vulnerability during economic downturns, as seen during the pandemic. Do you think the newly formed company will be a success? Comment your thoughts down below.

In this issue, Luke Hubbard and I cover Yahoo’s comeback.

1. When Verizon pivoted away from digital media, Apollo negotiated a carve-out of the combined Yahoo/AOL business for about $5 billion, around 5x EBITDA. They left lower-performing units (like parts of the ad tech business) outside the core debt package and structured financing so that value from certain asset sales would flow directly to equity, not debt repayment. Verizon stayed involved by rolling over equity and providing subordinated debt. This structure helped minimize downside risk while preserving upside potential.

2. One of the most important components of the deal’s success was the strategic monetization of non-core assets. Shortly after signing the deal, Apollo sold the Yahoo Japan trademark and associated royalty stream to Z Holdings in Japan for $1.6 billion. They also sold off real estate, data centers, IP addresses, and domain names, generating additional proceeds. These assets were structured outside the bank debt, so the sale proceeds were returned directly to Apollo’s equity. Within the first year, Apollo had effectively recovered nearly its entire $2 billion equity investment, essentially owning the remaining Yahoo platform “for free.”

3. Yahoo’s advertising technology business was fast-growing but deeply unprofitable. Apollo carved out this segment and executed two strategic transactions: (1) they merged the content delivery network business into Limelight Networks (renamed Edgio) and took a significant equity stake in the public company; (2) they sold another ad tech unit to Taboola in exchange for a 25% equity stake. These deals turned liabilities into valuable assets while improving Yahoo’s overall cash flow. Yahoo kept its DSP, and this year, Netflix included Yahoo's DSP in its lineup of programmatic advertising partners.

4. Jim Lanzone became the new CEO of Yahoo in 2021. Nearly every core Yahoo product, including mail, news, and homepage, has been completely redesigned within the past nine months, correcting years of stagnation (such as Yahoo Mail not being updated for a decade). Yahoo also uses AI at the product level to improve user experience. AI enhancements help users manage fantasy sports teams, summarize emails, and optimize ad campaigns. Yahoo also tailors news through its acquisition of Artifact (an AI-driven news app built by Instagram's founders, which now powers Yahoo News).

5. Yahoo reentered public consciousness with smart, cost-efficient marketing plays like their Super Bowl campaign featuring Bill Murray. The ad became one of the most-watched Super Bowl ads on YouTube. Yahoo Sports also teamed up with Boardroom to launch a new content hub and show, Network with Rich Kleiman (Kevin Durant’s business partner). The partnership debuted at the Yahoo NewFronts, where Kleiman was joined by Carmelo Anthony and Russell Wilson.

In this issue, Luke Hubbard and I explore Garnett Station Partners’ strategic investments in the restaurant industry.

1. Garnett Station Partners was founded in 2014 by Matthew Perelman and Alex Sloane. They didn’t set out to start an investment firm. Their original plan was to buy one small quick-service restaurant franchise, improve it, flip it, and go back to private equity. After multiple rejections from major franchisors (KFC said they were too young, had no experience, and no money), Burger King took a chance. They acquired a 23-unit distressed franchise in North Carolina for zero cash, just assumption of lease and remodel obligations.

2. The Burger Kings that they bought were losing money and required $8 million in capital for renovations. Matt and Alex lived with the retiring franchisee that summer, absorbing the business from the ground up. They refinanced real estate, renovated stores, and improved operations. Within a year, they were doing bolt-on acquisitions and scaling up to 165 Burger Kings and 55 Popeyes across 23 states.

3. By 2015, they had formed SPVs to acquire other multi-unit businesses, a car repair chain, a funeral home group, and a baby product distributor. These early reps helped hone the firm’s focus on fragmented industries with consolidation potential. They raised their first institutional fund by 2019 and sold the Burger King platform to Carrols Restaurant Group, which itself was acquired by Burger King.

4. Some private equity firms often make significant decisions like sale-leaseback transactions and high upfront leverage to minimize their own equity and extract immediate returns. They frequently replace owned real estate with long-term leases, creating massive fixed costs that limit flexibility during downturns. These firms may also overextend their store counts. In contrast, Garnett Station Partners avoids these traps by starting with 100% equity, gradually introducing debt only after businesses are stable, and targeting a 3x debt service coverage ratio with fixed interest structures to avoid rate risk. Their disciplined approach leads to sub-0.5% loss ratios.

You may have seen the news! Ron Jon just demolished their first original location in LBI and closed their Ocean City location!

Why is Ron Jon downsizing while Billabong continues to thrive?

In this issue, Luke Hubbard and I break down the two different business models.

Ron Jon:

Location: Primarily brick-and-mortar stores located in tourist traps.

Products: T-shirts and sweatshirts with the Ron Jon logo.

Clientele: Tourists who most likely won’t be repeat customers.

Revenue: Thrives on high foot traffic during the summer season. Low production costs, high margins.

CapEx: Maintaining retail space and upgrading the consumer experience.

Billabong:

Location: Some brick-and-mortar stores, while focused on selling online and at any retailer that carries swim/surf apparel.

Products: Wetsuits, bathing suits, and a wide variety of clothing.

Clientele: Surfers and swimmers who are likely to be repeat customers.

Revenue: Consistent revenue year-round, with higher sales of bathing suits during the summer season and higher sales of wetsuits during the winter season. Lower margins, higher volume.

CapEx: Product development and e-commerce.

Current Day:

Billabong: As a global brand, they are able to scale through digital channels and wholesale. Revenue is affected by macroeconomic shifts. In recent years, the swimwear market has grown significantly, allowing Billabong to thrive. This market is projected to continue growing at a rate of 4.5% per year.

Ron Jon: Limited ability to scale only focusing on high-traffic destinations and dependent on local tourism. Tourism in the U.S. has decreased by 10% in the last year, causing Ron Jon to struggle.

Which brand do you prefer? Comment down below.

Luke Hubbard and I covered the Chuck E. Cheese bankruptcy.

1. CEC Entertainment’s financial distress stemmed primarily from the COVID-19 pandemic, which devastated its in-person business model. In March 2020, the company suspended all on-premise dining, entertainment, and arcade operations across its 672 venues in response to public health mandates. This led to a more than 90% drop in revenue at the height of the shutdown. Already burdened by approximately $1B of debt from its 2014 LBO, the company lacked the liquidity cushion to weather extended closures. The crisis was further exacerbated by over $65M in unpaid rent, lawsuits from more than 50 landlords, a looming breach of financial covenants, and a springing term loan maturity.

2. CEC implemented multiple short-term measures to manage the liquidity crisis. It drew the remaining availability under its $114.8M revolving credit facility, reduced corporate and field staff, implemented rent deferrals and abatements, and began renegotiating lease terms across hundreds of locations. Management also launched an M&A sale process with a $875M reserve price but failed to attract qualifying bids.

3. CEC had approximately $1.08B in funded debt. This included $725M in first lien term loans, $114.8M drawn on a first lien revolver, and $215.7M of 8.00% unsecured senior notes due 2022. The first lien debt was governed by a 2019 credit agreement and secured by substantially all of the company’s assets. In addition, CEC had significant lease liabilities across more than 600 venues and substantial trade payables. The senior unsecured notes were structurally and contractually subordinated to the secured debt.

4. The confirmed POR reduced CEC’s funded debt by approximately $700M and recapitalized the company through a combination of debt-for-equity conversion and new capital. Specifically, $864M of first lien debt was exchanged for $175M in new second lien debt and 50% of the reorganized equity. A $200M exit facility was funded by first lien lenders in exchange for 45% of the reorganized equity, with the remaining 5% allocated as a backstop fee to the Ad Hoc Group. Senior unsecured noteholders received warrants for 10% of the new equity, struck at a $1.3B enterprise value, representing minimal recoveries. The GUC were paid from a $5.5M GUC Trust, with recoveries estimated between 12.2% and 19.4%. The company also secured lease amendments on over 340 locations.