Buffets Restaurants Holdings Inc. has filed for Chapter 11 bankruptcy protection for a second time and plans to shut 81 underperforming restaurants as it tries to cope with its debt.
The company, based in Eagan, Minn., operates 494 restaurants in 38 states under names such as Old Country Buffet, HomeTown Buffet, Ryan's and Tahoe Joe's Famous Steakhouse restaurant.
The company said Friday it was closing four stores in North Carolina and four stores in South Carolina. In the Charlotte area, only the restaurants at Concord Mills and in Gastonia are slated for closure.
Buffets said that its decision to file on Wednesday with the U.S. Bankruptcy Court in Delaware marks the beginning of a new era for the company and is the result strategic review that the company's board began in May.
The company said that investors who hold 83 percent of its senior debt have agreed to a restructuring that will eliminate nearly all of its $245 million in debt in exchange for all the equity in the company. That would free up cash flow for the company to invest in improving its restaurants.
Buffets said it expects to emerge from bankruptcy within six months. The company filed for bankruptcy protection in 2008 as it struggled with debt and the impact of the recession on consumers.
Buffets is one of several restaurant chains that has struggled over the past few years as consumers to cut back on their spending and begun eating at home more often. Restaurant companies such as Friendly's Ice Cream
Corp., Perkins & Marie Callender's, Real Mex and the SSI Group Holding Corp., which operates Souper Salad and Grandy's restaurants, have all filed for bankruptcy protection in recent years.
Buffets said it has secured a $50 million debtor-in-possession loan that, along with cash, will allow it to meet its normal operating costs during the restructuring process.
Paul, Weiss, Rifkind, Wharton & Garrison LLP and Young, Conaway, Stargatt & Taylor LLP are the company's legal advisors. The company's financial adviser is Moelis Inc.
Ryan's Locations Closing In Charlotte Metro CONCORD, NC Ryan's 8601 CONCORD MILLS BLVD CONCORD, NC 28027 (704) 979-1055
GASTONIA, NC Ryan's 2900 E FRANKLIN BLVD GASTONIA, NC 28056 (704) 868-8314