Wendy's noteholders allege event of default due to Tim Hortons sale

By Angela McDaniels

Seattle, Oct. 11 - Wendy's International, Inc. said some noteholders have issued a notice of default asserting that the company's spinoff of Tim Hortons Inc. on Sept. 29 violated the terms of one of the indentures governing Wendy's notes.

The notice follows an unsuccessful attempt by some noteholders to stop the spinoff through a lawsuit.

In September, the U.S. District Court in New York City denied a request from the noteholders to issue a restraining order and a preliminary injunction to prevent Wendy's distribution of its remaining interest in Tim Hortons to shareholders. The noteholders claimed that the spinoff violated indenture terms.

The company received notice on Tuesday that some, but not all, of the noteholders who filed the lawsuit issued the notice of default, according to a company news release.

In response, Wendy's filed a declaratory judgment in the U.S. District Court in New York City on Wednesday seeking a ruling from the court that no violation of the indenture has occurred.

The Dublin, Ohio-based quick service restaurant chain said it continues to believe that the noteholders' claims are without merit and that it will vigorously defend its position.

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