Quiznos Corp., the Denver-based toasted-sandwich chain that entered bankruptcy in March, received court approval of a recovery plan that cuts debt by more than $400 million.
U.S. Bankruptcy Judge Peter Walsh approved the plan Monday in Wilmington, Delaware. First-lien lenders owed $445 million, including Oaktree Capital Management LP, MSD Capital LP and Caspian Capital LP, will get 70 percent of the new stock plus new debt, according to court papers. Remaining stock will go to second-lien lenders owed $174 million.
Quiznos, founded in 1981, negotiated the plan with most of its senior lenders before seeking court protection on March 14, citing a weak job market and greater competition among fast-food restaurants. Quiznos franchisees operate about 2,100 restaurants in all 50 U.S. states and 34 countries, according to its website.
Jason Rubin, an attorney for Quiznos with Akin Gump Strauss Hauer & Feld LLP, told Walsh Monday that the plan was "fully consensual and uncontested." All objections to the plan were resolved prior to today's hearing.
General unsecured creditors will share $2 million in cash under the plan, with half coming from Quiznos and half from Fortress Investment Group LLC.
In 2012, Quiznos underwent an out-of-court financial restructuring that eliminated about $300 million in debt and gave majority ownership to billionaire Marc Lasry's Avenue Capital Group LLC.