Quiznos won bankruptcy court approval Monday to borrow $10 million from its lenders so the fast-food chain can continue operating and make payroll.
Judge Peter J. Walsh of the U.S. Bankruptcy Court in Wilmington, Del., on Monday authorized Denver-based Quiznos to draw $10 million of a $15 million bankruptcy loan from its senior lenders, who have already agreed to back the company’s quick restructuring.
Winning immediate access to the loan will allow Quiznos to continue normal operations — including making payroll, which comes due Wednesday — following its Chapter 11 filing last week.
Quiznos attorney Stephen Baldini of Akin Gump Strauss Hauer & Feld LLP had warned that if the funding was denied, the company may have to “curtail or terminate” its operations.
The senior lenders were owed more than $444 million before Quiznos filed for bankruptcy. They’ve agreed to forgive that debt in exchange for $200 million in new debt and a majority of the new equity in the restructured Quiznos.
Quiznos’s unsecured creditors, including junior lenders owed nearly $174 million, would get the choice to be repaid with a minority stake in Quiznos or proceeds from potential litigation.
Quiznos on Friday filed what’s called a prepackaged restructuring plan.
