Zips Car Wash, LLC, one of the largest privately owned express car wash operators in the United States, filed for Chapter 11 bankruptcy protection in the Northern District of Texas (Case No. 25-80069) with a pre-negotiated restructuring plan aimed at reducing its debt by approximately $279 million.
The Plano, Texas-based company, which operates more than 260 locations across 23 states, entered bankruptcy with support from 100% of its lenders and major shareholders. The restructuring plan proposes to reduce the company's $653.9 million in funded debt obligations while providing access to new financing to fund operations.
The plan includes $375 million in take-back debt, comprising a $150 million HoldCo facility and a $225 million OpCo term loan facility. Additionally, the reorganized company will have access to a new $15 million revolving credit facility. To finance the Chapter 11 process, Zips has secured an $82.5 million debtor-in-possession financing facility, including $30 million in new money from existing secured lenders.
Kirkland & Ellis LLP and Gray Reed are serving as co-counsel to Zips in the bankruptcy proceedings. The company aims to complete its restructuring within 65 days, as mandated by milestones in the DIP credit agreement.
Zips, founded in 2004, has faced challenges including substantial debt obligations, macroeconomic headwinds, and increased competition in the car wash industry. The company currently serves approximately 24 million cars annually and maintains about 625,000 members in its Unlimited Wash Club subscription program.
This article was prepared using Stretto Conductor, our new AI-powered assistant that's here to help. Stretto Conductor was able to create this summary of a 162 page court filing in less than a minute. Always review the underlying docket filings for accurate information. The information and responses generated by Stretto Conductor may contain errors or inaccuracies and should not be relied upon as a substitute for professional or legal advice.
Document length: 162 pages