Quiznos reaches settlement with creditors, but may still file for bankruptcy

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.

Bankruptcy attorneys 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.