You’re watching as your parent company heads into a debt restructuring program. The company, a chain of sandwich shops known for toasted subs, had been trying to negotiate with its creditors, store landlords and others to avoid bankruptcy, but Quiznos and its creditors agreed this week to hand over majority ownership to Avenue Capital Group, according to The Wall Street Journal.
The hedge fund will invest $150 million into Quiznos and convert some debt to equity to save the company from bankruptcy.
Quiznos had taken on massive debt five years ago in a leveraged buyout. Apparently the sandwich chain has also been struggling with declining sales (not shocking, since Subway and other competitors can do toasted subs as well) and violated its debt terms over the summer, the Journal says. Full post.