Quiznos Corp., the Denver-based toasted-sandwich chain, filed for bankruptcy days after pizzeria company Sbarro LLC sought protection from creditors, as competition among fast-food restaurants grows in a tight market.
/ Source: Bloomberg
Quiznos said it’s seeking to implement a reorganization that would cut debt by $400 million. Most of its senior lenders support the plan and the chain will keep operating during bankruptcy, according to a company statement yesterday.
Competition among U.S. restaurants has been increasing as newer fast-casual chains expand quickly. Sbarro filed for bankruptcy on March 10, while the owner of Hot Dog on a Stick filed last month, as foot traffic in shopping malls dwindled and chains such as Panera Bread Co., Chipotle Mexican Grill Inc. and Subway Restaurants cut into their business.
Quiznos said it will seek court approval of a $15 million loan from its senior lenders to continue operations as it restructures.
In 2012, Quiznos underwent an out-of-court financial restructuring that eliminated about $300 million in debt and gave majority ownership to billionaire Marc Lasry’s Avenue Capital Group LLC through a $150 million equity infusion and debt-to-equity swap.