By Jim Utter
Director of Journalism
ZIPS Car Wash has already started to shutter some locations following its Chapter 11 bankruptcy filing last week.
Two sites in Wisconsin – in the cities of Manitowoc and Fond du Lac – have recently shut down without warning.
ZIPS confirmed the closings saying it was a “difficult decision” although it did not say the closings were tied to the bankruptcy directly.
Customers with memberships who frequented those locations were encouraged to call (920) 789-2924 for more information.
Last Wednesday night, ZIPS, with the support of its existing lenders and equity holders, filed voluntary Chapter 11 in U.S. Bankruptcy Court for the Northern District of Texas.
The move was not unexpected as multiple reports over the last month indicated the company was looking for rent concessions from some landlords as well as potentially selling off sites. The Atlantic Street Capital-backed company had been in negotiations with lenders including HPS Investment Partners, PennantPark Investment Corp. and Brightwood Capital Advisors.
As part of the filing, ZIPS said it had agreed to the terms of a restructuring plan with a group of its existing private lenders and expects it will reduce its debt obligations by approximately $279 million. According to the court filing, ZIPS has $654 million of total funded debt.
ZIPS also said it hoped to secure $15 million of new capital to support the restructured business and “future strategic initiatives.”
