|Avenue Capital Group, the hedge fund founded by siblings Marc Lasry and Sonia Gardner, is set to make a bid for a controlling share of restaurant chain Quiznos. According to an article in the Denver Post, the deal would transform Avenue Capital Group’s current debt holdings in Quiznos and a fresh cash investment into a 70% stake in Quiznos. The Denver-based Quiznos is currently controlled jointly by CCMP Capital Advisors, a private-equity spinout of JP Morgan, and Consumer Capital Partners, the hedge fund managed by Quiznos founder Rick Schaden. |
Quiznos recently announced a technical default on its loans, so the deal with Avenue Capital may be more attractive to creditors than the drawn-out and often uncertain route that is bankruptcy court. Avenue Capital aims to reduce Quiznos’s debt by close to $300 million; the company has struggled to repay debts with sales falling 23% from 2008-2010 with an estimated 2000 store closures in the same period. Creditors will have until late January to make a decision.