(Bloomberg) -- Thrasio Holdings Inc. has filed for Chapter 11 as part of a deal with lenders to provide it with fresh capital and get rid of about $495 million of debt.

The company, a Amazon.com Inc. seller, initiated the process in New Jersey, according to a filing dated Feb. 28. It is seeking to pay employees’ wages, as well as suppliers, while the case is ongoing.

“Thrasio is one of the largest third-party sellers on the Amazon marketplace, and with a strengthened balance sheet and new capital, we will be better equipped to support our brands,” Greg Greeley, chief executive officer of Thrasio, said in a statement. 

During the pandemic, investors pumped billions of dollars — mostly in debt — into startups rolling up popular brands sold on Amazon.com, betting on the online sales boom. But as people returned to their old consumption patterns, Amazon sales slowed, and the companies began to grapple with rising interest rates on their debt. In 2021 Thrasio borrowed $500 million from a syndicate of lenders including JPMorgan Chase & Co., Goldman Sachs Group Inc.’s Private Credit Group and BlackRock Inc.

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The restructuring support agreement reached with lenders of both its revolving-credit facility and its term loan will see Thrasio’s interest payments delayed for a year. Some creditors have committed as much as $90 million in new financing for the Walpole, Massachusetts-based firm. 

--With assistance from Janine Phakdeetham, Nurin Sofia and Lucca de Paoli.

(Adds quote from chief executive officer, details of 2021 loan.)

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