Replacement tires supplier American Tire Distributors (ATD) filed for bankruptcy protection Oct. 22 for the second time in six years.

Huntersville, NC-based ATD signed a restructuring support agreement (RSA) with a group of lenders collectively referred to as the “Ad Hoc Lender Group,” which represents 90% of its debt.

The Ad Hoc Lender Group — which include funds managed by Guggenheim Partners, Monarch Alternative Capital, Sculptor Management and Silver Point Capital  Management — agreed to provide an additional $250 million in financing and to acquire the company if no other buyers come forward.

“We are taking further steps to position ATD for our next phase as a stronger distribution partner to our manufacturers and customers as we return to our roots and hone our core value proposition as a wholesale distributor,” ATD Interim CEO and AP Services Partner & Managing Director Michael Feder said in an Oct. 22 news release. “We are confident that entering into this process with the support of the Ad Hoc Lender Group will enable ATD to execute its business strategy and achieve our long-term objectives.”

To implement the terms of the RSA and pursue a value-maximizing sales process, the company has initiated voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware. Throughout the Chapter 11 process, ATD will maintain operations across its U.S. distribution network.

In 2018, ATD had previously filed for bankruptcy and successfully completed a restructuring that eliminated $1.1 billion in debt and secured $1 billion in financing.

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