Part 3/10:
Success rapidly turned to peril as the company’s aggressive expansion strategy caused burgeoning operational costs and debt. By the late 1990s, bookkeeping failures led to severe financial mismanagement, resulting in significant losses. Class-action lawsuits soon followed, fraying the trust between Party City and its shareholders. This culminated in the leadership stepping down and an arduous road toward restructuring, where the company needed to reassure stakeholders of its viability.