Quiznos has stated they came up with a restructuring plan
with several of its creditors to settle $850 million dollars of debt but that a
may still file for Chapter 11.
A plan outlined Friday calls for a $150 million dollar
investment from one of the chains creditors, investment firm Avenue Capital.
The plan would eliminate one-third of the company’s debt and make Avenue
Capital the majority owner. A portion of the investment, $75 million will allow
the Quiznos to continue operations.
The Denver-based chain says they will file for Chapter 11 if
they cannot reach restructuring deals with other creditors. They shelve this
plan if lienholders accept its restructuring plan. The company will also ask
for concessions from other creditors.
may recommend Chapter 11 for any business that wishes to continue operation but
needs some relief from debt and liens.
Bankruptcy offers a business or individual the chance to
eliminate or reduced the amount of debt they owe. Sometimes the debt can be so
overwhelming that a business cannot continue to operate. Instead of dissolving
the company completely, a bankruptcy lawyer can outline the ways that outstanding debt can reduced or dismissed.
A bankruptcy attorney
will be able to give the advice a business needs to determine if bankruptcy
will be right for them. They will be able to determine which structure is most
appropriate for the businesses’ needs.