Quiznos sandwich shop has secured financing to restructure its debts out of court which will prevent the company from entering bankruptcy.
A global investment, firm Avenue Capital will provide Quiznos with $150 million in new equity to allow it to continue operations. Under the agreement creditors have agreed to forgive about one-third of its debt, about $300 million. Avenue Capital will take over majority ownership of the chain.
Quiznos accumulated significant debt in a leveraged buy out by private equity firm CCMP Capital Advisors LLC and Consumer Capital Partners, according to the Wall Street Journal.
Last month Quiznos outlined a restructuring deal, informing its creditors they had a month to accept the terms. Otherwise the sandwich chain would have gone bankrupt.
Quiznos operates 4,000 shops in the U.S. and 300 locations in Canada.
Some companies can avoid bankruptcy by obtaining financial assistance from investment firms, but this is not an option for all businesses. For the company’s who cannot obtain financing a bankruptcy attorney
can offer them alternatives.
gives some businesses to opportunity to shed some of its debt through various structures, which can be explained by a bankruptcy attorney. For some businesses debt protection will give them the opportunity to continue operating while they reduce their debt liabilities. Other companies can reduce or eliminate debt by selling off their assets.
A bankruptcy lawyer
will determine which structure is in line with the needs of each business.