Business workout

Perkins, Marie Callender’s file for Chapter 11

Famous for its pies and all-day breakfast, Perkins & Marie Callender’s Inc. filed for Chapter 11 bankruptcy protection this week, citing the poor economy and rising food prices for its loss of profits. As part of the process, 65 out of 600 stores have been closed throughout the country. Some restaurant patrons were reportedly kicked out of stores mid-meal because of the closings.

Unfortunately, the bankruptcy documents filed with the court estimated that 2,500 jobs will be lost nationwide because of the closings and other changes within the company. However, the company’s restructuring plan under Chapter 11 hopes to save the remaining stores by turning ownership over to Minnesota-based Wayzata Investment Partners, which manages the funds holding the company’s unsecured debt.

The current president of Perkins & Marie Callender’s Inc., who has held the position since 2004, said in filed court documents that the company especially struggled in the states that were impacted the most by the poor economy and housing market crash such as Florida and California. The Marie Callender’s restaurants are primarily located in California, where 13 were closed.

In its petition for Chapter 11, the company listed its total assets at $290 million and said it currently owes $440.8 million in liabilities. Eleven of its affiliate companies were also included in the filing, and it was indicated that the company saw only $507 million in sales last year.

As part of the bankruptcy, all Marie Callender trademarks were sold to a company that is licensed to sell Marie Callender frozen food. However, Perkins & Marie Callender’s Inc. will still be able to use the Marie Callender name for its restaurants and bakeries.

According to its restructuring plan, the company will borrow as much as $21 million so that its remaining stores can keep operating while going through bankruptcy.

The Chicago Tribune reported that other restaurant chains, including Uno Chicago Grill pizza, Fuddruckers, Charlie Brown’s Steakhouse and Sbarro’s, have all recently used Chapter 11 bankruptcy to reorganize their debt and revitalize their businesses. Hopefully Perkins & Marie Callender’s will achieve this same success through the process.

Source: Chicago Tribune, “Perkins, Marie Callender restaurants in Chapter 11,” 6/13/2011.

Eliminating Debt in the Smartest Way Possible

There is any number of viable reasons that your business could be experience financial difficulties, but once you’ve fallen deep into debt what matters is finding the best possible way to eliminate that debt in order to get back on your feet. Rather than wasting time or running the risk of making poor decisions that force your ailing company farther into debt, you should reach out to a qualified professional in order to help you accurately determine the best course of action for paying off creditors.

An experienced Colorado business bankruptcy attorney will examine every facet of your business finances in order to ensure that you are presented with every available option for working to eliminate your debt. Your Colorado business bankruptcy attorney will be able to provide a detailed explanation of the potential benefits of each type of business bankruptcy that you may be eligible for and help you to determine which route will lead to debt resolution in the fastest and most convenient manner.

Even the hardest working business owners and the smartest business people can run into financial problems. Rather than letting the stress of financial duress consume you as your business debt continues to climb you should reach out to an experienced Colorado business bankruptcy attorney who will be able to help you sort through all of the confusion of your current financial situation and present the most clear cut and effective route for you to follow in order to clear up your business debt.

Colorado-based Jeweler Nearing End of Chapter 11 Bankruptcy

Foregoing the pursuit of a business workout, Centennial, Colorado-based jewelry store chain Shane Co. has been making strides toward completing Chapter 11 bankruptcy since it filed for protection from creditors back in January of 2009. Shane cited the poor economy and the severely negative impact it has had on the sales of their product, which is inherently a luxury item, when filing for bankruptcy. The company had also defaulted on loan agreement terms with various creditors.

Shane Co. was able to obtain court approval last week to send the reorganization plan out to creditors for a vote on whether or not to approve the plan. U.S. Bankruptcy Judge Howard Tallman presided over a two-day long hearing in a Denver courtroom last week to grant approval of the jewelry retail company’s disclosure statement to be sent to creditors. The disclosure statement effectively explains to creditors the next steps Shane Co. will be taking in the coming months to completing Chapter 11. Judge Tallman set a hearing for November 10th to address the status of the plan’s confirmation at that time.

The plan outlined in the disclosure statement stipulates Shane Co. will repay 100% of what is currently owed to creditors holding secured claims. Shane Co.’s plan also states they plan to pay those creditors with unsecured claims against the company over an unspecified period of time from the available company revenue. The company’s 2008 revenue was $64 million less than 2007′s, a 23 percent decrease that was a deciding factor in Shane Co. filing for Chapter 11 Bankruptcy.

Source: Bloomberg “Jeweler Shane’s Bankruptcy Reorganization Plan to Go to Creditors for Vote” 9/29/10