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By Rachel Butt and Reshmi Basu | Bloomberg

Jenny Craig Inc., the weight-loss services provider backed by H.I.G. Capital, is considering a bankruptcy filing if efforts to find a buyer for its assets fail, according to people with knowledge of the situation.

A filing could come as soon as next week, said the people, who asked not to be identified because the talks are private.

The struggling diet company remains in months-long discussions with its lenders to re-work roughly $250 million of debt. Miller Buckfire & Co. has been running a sale process on behalf of the company, which has a loan scheduled to mature in October 2024.

While the company will likely pursue a liquidation, the talks are fluid and plans could change, the people said.

“Like many other companies, we’re currently transitioning from a brick-and-mortar retail business to a customer-friendly, e-commerce driven model. We will have more details to share in the coming weeks as our plans are solidified,” CEO and President Mandy Dowson told Bloomberg.

Representatives at H.I.G. didn’t respond to requests for comment.

CION Investment Corp. and Pacific Investment Management Co. are among major lenders to the company. As of the fourth quarter, CION marked its first-lien loan position at roughly 78% of par value and moved its investments to non-accrual status, according to a filing. Non-accrual loans indicate that the company’s financial situation is deteriorating or debt repayment is at risk.