On this past Friday, March 14, 2014, sandwich chain Quiznos filed for Chapter 11 Bankruptcy. The petition was filed in the U.S. Bankruptcy Court in Wilmington, Delaware. According to documents filed with the court Quiznos has less than $1 million in assets, but more than $500 million in liabilities.
Quiznos, founded in 1981, has quick-service restaurants in all 50 states and 34 countries, according to its website. At one time the restaurant chain even rivaled Subway, but Quiznos has been struggling financially for years now. Quiznos once had more than 5,000 stores in 2008, but over time has had to close approximately 60% of their locations. In 2012, Quiznos underwent an out-of-court financial restructuring that eliminated about $300 million of its 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.
The Denver-based company’s board voted for a pre-packaged restructuring plan that would reduce its debt by more than $400 million. Quiznos’ senior lenders have made a commitment of $15 million to support ongoing operations during the bankruptcy proceedings.
All but seven of Quiznos current 2,100 restaurants in the United States and 30 other countries are independently owned franchises, and will remain open and operating as usual.