Popular restaurant chain operator files for Chapter 11 bankruptcy

Casual dining chains have faced a number of challenges this year, with rising food and labor costs, higher interest rates on their debt and consumers being more selective about their spending.

Several restaurants closed underperforming locations, and some were forced to file for bankruptcy to reorganize their businesses, which may have included shuttering units.

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Bloomin’ Brands (BLMN) which owns Outback Steakhouse, Bonefish Grill, Fleming’s, Carrabba’s Italian Grill and Aussie Grill earlier this year decided to take aggressive steps to grow its portfolio and end the drain of underperforming stores by closing 38 U.S. locations and three international. The restaurant chain did not file for bankruptcy, however.

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Red Lobster, however, filed for Chapter 11 bankruptcy protection on May 19 with about $300 million in debt and has permanently closed more than 100 restaurants. The chain now operates approximately 545 restaurants in 44 states.

Rubio’s Coastal Grill claimed it was victimized by California’s AB 1228, which raised the minimum wage for fast-food workers at chains that have more than 60 locations in the state from $16 to $20 an hour.

The Mexican fast-casual chain filed for Chapter 11 bankruptcy on June 5 and closed 48 locations in the Golden State. It had a total of 134 locations in California, Arizona and Nevada before the filing.

Popular Italian restaurant chain Buca di Beppo filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Northern District of Texas in Dallas on Aug. 4, seeking to reorganize with the support of creditors after closing 13 underperforming locations, including restaurants in Sacramento. and Salt Lake City. Currently operates 44 main locations in 14 states, two international locations and plans to open one new location

Finally, the manager of a chain of 14 Applebee’s Neighborhood Grill & Bar franchise restaurants in four states filed for Chapter 11 bankruptcy protection on Oct. 4 as a creditor and plaintiff in a lawsuit against a former franchisee, who seeks to retain the assets of his preferred claim. .

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Michael Goldberg, receiver for franchisee Oklahoma Apple LLC and affiliates Louisiana Apple LLC, Kentucky Apple LLC and Mountain Apple LLC, filed its petition in the U.S. Bankruptcy Court for the Southern District of Florida, listing assets and liabilities of up to 50,000 USD.

More bankruptcy stories:

• Popular fast food chain is closing locations, no plans for bankruptcy yet
• Iconic grocery retailer closes, not yet filed for bankruptcy
• The bankruptcy filing can’t save the popular grocery brand

A judge in the U.S. District Court for the Southern District of Florida in September appointed Goldberg’s administrator of the franchise restaurants located in Arkansas, Indiana, Kentucky and Oklahoma at the request of City National Bank of Florida.

On August 28, the bank sued the former franchisee Louisiana Apple and its affiliates in the same district court for alleged breach of contract for failing to pay the $8.33 million loan in principal, interest and fees and to foreclose on the loan security . The former franchisee allegedly transferred ownership to SBG Apple Central I LLC and related entities that are wholly owned by Starboard Group Holdings without the bank’s consent, according to court documents.

Months after City National Bank entered into a forbearance agreement with Louisiana Apple, the former franchisee reportedly entered into a separate agreement with Dine Brands Global. (FROM) franchisor, Applebee’s Franchisor LLC and SBG to transfer full control of its franchise assets as well as operation of the restaurants to SBG, according to court documents.

Any subsequent litigation by the parties involved will be resolved in the bankruptcy court, which now has jurisdiction.

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