Bank says Quaker Steak in default on $4.3 million loan - WFMJ.com News weather sports for Youngstown-Warren Ohio

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Bank says Quaker Steak in default on $4.3 million loan

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SHARON, Pa. -

The Sharon, Pennsylvania based Quaker Steak & Lube restaurant chain is in the process of being sold to a new owner as part of a filing in bankruptcy court.

According to a news release from Quaker Steak, Travel Centers of America has agreed to acquire Quaker Steak for approximately $25 million.

Earlier Monday Quaker Steak & Lube began proceedings for reorganization under Chapter 11 of the U.S. Bankruptcy Code and simultaneously filed in court the asset purchase and $2 million debtor in possession financing agreements with TA.

Quaker Steak's parent company Lube Holdings, filed a statement listing liabilities between $1 million and $10 million owed to between 200 and 999 creditors.

One of those creditors is Wells Fargo Bank, which claimed last month that the chain defaulted on $4.3 million worth of commercial loans and had not made a payment since August of last year.

Lube Holdings owes $1.7 million to it's twenty of it's largest unsecured creditors in the form of rent, taxes and other debts

Statements from both companies say that TA has agreed to offer employment following the purchase to substantially all of Quaker Steak & Lube's current employees following the closing of the deal, which is subject to bankruptcy court approval. The companies say expect to complete the transaction in early 2016.

Other conditions including an auction process supervised by the bankruptcy court.

According to Greg Lippert, chief executive officer of Quaker Steak & Lube. “TA has stated its desire to use the existing company and franchisee Quaker Steak & Lube locations that it acquires as a core around which to expand Quaker Steak & Lube into a nationally recognized brand.”

Lippert added, “We foresee a positive impact from these transactions to our restaurants. In fact, under TA, we’re confident that the number of our locations will continue to grow and our franchise owners, employees and suppliers will benefit from a stronger Quaker Steak & Lube.”

A news release from TA says on of the expected benefits from the sale will be expanding the Quaker Steak & Lube restaurant business into new markets.

Founded in 1974, Quaker Steak & Lube has more than 50 locations across 16 states.

TA, a publicly-traded company, operates over 500 full and quick serve restaurants, principally located in 253 full-service travel centers and 184 convenience stores in 43 states.  

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