American Tire Creditor Plan Said to Include Possible Bankruptcy

American Tire Distributors Inc. is considering a bankruptcy filing as part of a proposed $2.4 billion debt overhaul, according to people with knowledge of the matter.

The deal would give holders of ATD’s subordinated bonds a 95 percent stake in the reorganized company, wiping out that debt while leaving the its term loan outstanding, said the people, who asked not to be identified because the discussions are private. The tire distributor skipped an interest payment on the junior notes yesterday, kicking off a 30-day grace period before a default is triggered. A filing isn’t certain, and the company could avoid ...