Quiznos Gets Court Approval to Access DIP Financing
Quiznos announced that the U.S. Bankruptcy Court in Wilmington, DE, granted the company’s request for certain first day orders that help support its business.
Quiznos said the court provided interim authorization for the company to access up to $10 million of the $15 million debtor-in-possession financing (“DIP”) committed by its senior lenders. The new financing, combined with cash generated from the company’s ongoing operations, will be available to support the business during the restructuring process.
The company also received interim approval to continue paying employee wages, salaries, benefits and other employee obligations. The Court also granted Quiznos final authorization to continue honoring all current customer and franchisee programs and to pay certain pre-petition claims arising under the Perishable Agriculture Commodities Act (PACA) and under Bankruptcy Code Section 503(b)(9), as well as pre-petition claims from shippers and claims incurred in connection with post-petition delivery of goods and services.
As previously announced, Quiznos voluntarily filed a “pre-packaged” restructuring plan under Chapter 11 of the U.S. Bankruptcy Code to enable the Company to reduce its debt by more than $400 million. The Company’s senior lenders have voted overwhelmingly in favor of the plan, which is intended to increase the Company’s flexibility as it executes operational enhancements designed to strengthen performance, revitalize the Quiznos brand and reinforce its promise as a fresh, high-quality and great-tasting alternative to traditional fast food offerings. All but seven of Quiznos’ nearly 2,100 restaurants are independently owned and operated by franchisees in the U.S. and 30 other countries around the world. As separate businesses, these restaurants are not a part of the Chapter 11 proceedings and are open and operating as usual. The Company expects to continue operating in the ordinary course throughout the restructuring process.
Previously on abfjournal: Quiznos Files for Prepackaged Chapter 11, March 17, 2014