Perkins & Marie Callender’s

Perkins’ regulars at 4 Colorado sites are forced to find a new seat

When a business files for Chapter 11 bankruptcy protection, the assets are not sold off to pay the debt, but the business is allowed to stay open. The business becomes a debtor-in-possession, essentially allowing it to continue to maintain its operations under the purview of the bankruptcy court. The business can reorganize its debts under a plan approved by a United States judge.

When a multiple location business continues to operate during the bankruptcy process, it does not mean that every store they own will remain open. Some Colorado regulars will have to find a new Perkins restaurant after the company closed four of its businesses as a result of their recent Chapter 11 bankruptcy protection filing.

On Thursday, July 14, 2011, Perkins & Marie Callender’s submitted a plan for reorganization with the bankruptcy court. Although the plan has yet to be approved, the national corporation chose to preemptively close the Perkins restaurants located in the state, three of which were all in Colorado Springs. The corporation also chose to end operations in 27 other locations across the country.

The president and chief executive officer for Perkins & Marie Callender’s expressed his hope and expectation that the multiple closings will allow the corporation to “emerge from its financial restructuring in a significantly strengthened financial position.”

Colorado residents who love their American eatery can still visit the nine locations that remain open. Both restaurants in Loveland will continue to serve its customers along with single locations in Arvada, Golden, Westminster, Denver, Fort Collins, Greeley and Longmont.

Source: The Denver Post, “Bankruptcy filing closes four Perkins restaurants in Colorado,” Howard Pankratz, 16 July 2011

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.