The coffee chain Starbucks Corp. will keep running its biggest-selling stores, as well as the chain’s other big retailers, under a plan that would allow them to keep operating even after the retailer’s owners filed for bankruptcy.
In a filing with the U.S. Securities and Exchange Commission on Tuesday, Starbucks said it plans to keep selling its $2 billion in assets under the plan.
The plan is a major win for the chain, which has been battling for months with an increasingly aggressive lawsuit filed by rival Trader Joe’s Inc. The company is seeking $6.8 billion in damages, a record for the U-S.
class action against a big retailer.
The move by Starbucks follows a lawsuit filed last month by the retailer.
In the suit, Starbucks argued that Trader Joe had unfairly used the bankruptcy filing to take advantage of its ability to collect on a $5 billion loan it had previously secured to expand its stores in the U, as the retailer has been unable to find the $5.9 billion it needs to cover its $7.5 billion debt.
The lawsuit also accused the chain of using bankruptcy to increase its own profits, while claiming the filing was a “defamation campaign” by Trader Joe.
Starbucks’ plans to continue operating the chain even after its owners filed bankruptcy could help the retailer avoid having to pay out significant sums of money to creditors in the future.
But the plan could also be an obstacle to the company’s bankruptcy case against Trader Joe, which is currently underway in bankruptcy court in Delaware.
The case is one of the biggest challenges the company has faced in the past few years.
Under the plan, Starbucks would continue to pay creditors in connection with the bankruptcy, and will continue paying them if Trader Joe does not repay them in full.
Under those conditions, Starbucks will continue selling its coffee stores, and it could continue to offer the caramel drinks that were initially available in its stores and in its restaurants, according to the filing.
The Starbucks plan also includes an exception for Starbucks stores, which would be allowed to reopen after the chain filed for Chapter 11 bankruptcy.
Under a previous plan, those stores were allowed to re-open in July.
“The new plan provides that Starbucks stores and other businesses that remain in the business plan can continue operating under the new conditions even after Starbucks files for bankruptcy, as long as Starbucks is able to make the necessary payments and continues to pay all of the debt holders,” the filing said.
The filing said Starbucks plans to hold regular business meetings with creditors in its plan.
It did not say how much the company planned to pay each creditor, but said it was expecting to pay at least $1 billion in the bankruptcy settlement.
The proposed plan will also allow Starbucks to restructure its debt, though the company would still be required to pay its debt holders.
Under its plan, the company will be able to refinance up to $1.6 billion of its debt at lower rates, which means the company may be able pay some of its obligations at lower interest rates than it had planned.
The court filing also said Starbucks is willing to negotiate an alternative plan that is more favorable to creditors.
“This plan allows Starbucks to remain viable as a publicly traded company and to continue to deliver our customers a great service while remaining a viable, profitable and socially responsible company, which will enable Starbucks to continue providing its customers with an outstanding product and service, while still having a positive impact on society,” the company said in the filing, adding that the new plan would not affect the company “in any way.”
Trader Joe is also challenging Starbucks’ bankruptcy filing.
In its lawsuit, Trader Joe has claimed that Starbucks owes it $1,400 per person and $400 per year in interest, and that Starbucks has not paid it since 2006.
The suit is also asking the court to force Starbucks to pay an additional $1 million to the retail giant in interest over time.
In addition, Trader Mike’s Inc., which owns about half of Trader Joe outlets, is also fighting Starbucks’ plan.
In January, the retailer filed a lawsuit against Starbucks and Trader Joe and other companies, saying it is owed $1 per person, $400 annually and $1 in interest.
Trader Joe filed a similar lawsuit in November, saying that Starbucks is owed at least a total of $3 billion and that it owes at least one-third of the company at least that amount.
Trader Mike filed a separate lawsuit against TraderJoe in February, alleging that the company owes Trader Joe $4.8 million and $2.8 in interest annually.
TraderJoe has also asked for the court’s permission to freeze any money owed to the retailer if TraderJoe agrees to pay the retailer a certain amount in order to avoid bankruptcy.