The 2024 bankruptcy of American Tire Distributors Inc. (ATD) forced an amendment to the company’s agreement and payment plan to Monro Inc. for the wholesale distribution operation ATD purchased two years earlier. Monro was still owed nearly $7 million.
Attorneys for Monro filed an objection in ATD’s bankruptcy case in December, noting the retailer was still owed $6,948,086.
The two companies finalized an amended agreement this month, according to a filing with the U.S. Securities and Exchange Commission (SEC). The remaining balance is being split in half and two equal payments were scheduled to be paid Feb. 21, 2025, and June 25, 2025.
Once those payments are made, “the earnout payments owed to (Monro) will be satisfied in full,” Monro said in the SEC filing.
The lingering nearly $7 million is a small fraction of the full $102 million ATD agreed to pay for Monro’s tire inventory and wholesale distribution assets. An initial $62 million was paid when the transaction closed in June 2022, and the remaining $40 million was to be paid in a series of quarterly payments over approximately a two-year period.
Once those payments were complete, the original agreement called for Monro’s retail stores to purchase “at least 90%” of its passenger, light truck and medium truck tires through ATD.
Monro’s tire purchases from ATD for the first 12 months after the closing earned the retailer an “earnout per-tire amount” from ATD. (The amount was $10.42 per tire in the first six months and $9.80 per tire in months seven through 12.)
In the February 2025 SEC filing, Monro notes that the two parties have “also agreed to certain changes to the terms of service level agreements and ATD agreed to use commercially reasonable efforts to enable consistent supply to meet Monro’s demand for products under the agreement.” The specific details of those changes weren’t detailed.
