Bonds
Hooters Bankruptcy Threatens Even Bonds Supposed to Be Bankruptcy-Proof
- Securitized debt is considered insulated from credit risk
- Yet Hooters bonds will likely be included in restructuring
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Holders of asset-backed bonds issued by a Hooters of America unit are seeking advice on their rights and options as the casual-dining franchise prepares a potential bankruptcy filing in the coming months, according to people with knowledge of the matter.
Investors in those bonds have expressed concern a bankruptcy may affect or impair their holdings, which could lose value or face restructuring as part of a larger plan to address Hooters’ liabilities, the people said. Some are huddling with law firm White & Case for guidance, according to one of the people, all of whom asked not to be identified discussing private discussions.