Quiznos is preparing to file for bankruptcy protection within the next few weeks due to declining sales and about $570 million in debt, reports published Thursday say.
Citing people familiar with the matter, the Wall Street Journal and CNBC said the sandwich chain has been negotiating with creditors on a restructuring plan to help with the bankruptcy-court process. A final deal on the plan has not yet been reached. Two years earlier, the privately held Quiznos reached an out-of-court restructuring deal that cut its debt load by more than a third.
Now, lenders have granted the Denver-based chain forbearance agreements to keep the company alive while negotiating repayment terms with creditors Fortress Investment Group, Oaktree Capital Management and Avenue Capital Group.
The Chapter 11 filing would help the company deal with its leases, outstanding litigation and unattractive contracts, which were struck before Quiznos began closing thousands of its stores over the past few years.
-- USA Today