With the release of news on American Tire Distributors filing for Chapter 11 bankruptcy, Tire Review obtained a copy of the letter from ATD CEO and President Stuart Schuette to Tire Pros franchisees, reassuring them that it will be “business as usual” with no lapse in service or commitment to them throughout the process.
“Dear Valued Tire Pros Franchisees,
“I’m writing today with an important update about American Tire Distributors. Since announcing in early September that we had entered into an agreement in principle with our bondholders, we’ve held discussions with our stakeholders to finalize the agreement.
“We appreciate the unwavering support we received from both customers and manufacturer partners during these last several weeks, which we believe reflects our value proposition and trusted relationships with them.
“ATD is moving forward on a clear and expedited path to strengthen its financial position and continue its successful, game-changing transformation. Today, we are announcing a positive, intentional and strategic next step in the process of making ATD stronger than ever. ATD has entered into a final agreement with approximately 75% of our bondholders that would reduce the Company’s debt by approximately $1.1 billion and provide us with financial flexibility as we continue our ongoing transformation. To facilitate the agreement, we have voluntarily commenced a court-supervised process under Chapter 11 of the U.S. Bankruptcy Code.
“It is very easy to get lost in all of the technical and legal jargon. To keep it simple, here are the key things you need to know about what this means for our business and for you and your business:
- We are open for business and continuing to serve customers and franchise partners as we always have. We are as focused as ever on providing you with the unparalleled selection and service you have come to expect from us.
- The Tire Pros franchise remains a cornerstone of the ATD strategy. ATD will continue to support you and provide the products, promotions and support to serve your consumers like you always do. ATD is investing in new capabilities to support your business and we are excited about developing new ways to serve you at an even higher level.
- Deliveries are continuing without interruption. We have strong relationships with our manufacturer partners and will continue to provide you the support and service you need to drive your business. You can expect business as usual.
- Our commitment to serving you is unwavering. Everything we are doing continues to be driven by three customer-focused objectives: driving store traffic, enhancing your operations and maximizing your profit.
- We are confident that this financial restructuring process will help make us a stronger company and enable us to support you even better in the future.
“Looking ahead, we intend to move through this process as quickly as possible. The strong support of our bondholders will allow us to do so on an accelerated basis.
“We look forward to continuing to introduce innovative technology, new programs and tools over the coming months to help drive traffic to your business, enhance your operations and maximize your profitability. Our company has seen many changes to the tire industry over the past 80 years, and we have always succeeded by remaining focused on supporting our customers across all channels, and the consumers they serve. Our commitment to helping you grow your business in meaningful ways remains unchanged.
“We will continue to keep you informed of our progress. You can find FAQs and additional information on our restructuring website, www.ATDrecapitalization.com. If you have further questions, please don’t hesitate to contact your Tire Pros RAM.
“As always, we value our relationship with you. Thank you for your continued support.
President – Chief Executive Officer
American Tire Distributors.”