restructuring
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.
Another orchestra to play its way out of bankruptcy
Recently, we discussed how after filing Chapter 11 bankruptcy in April, the Philadelphia Orchestra announced that it has a new plan to keep entertaining and bring in a profit. Now it has been reported that the 75-year-old Louisville Orchestra has also submitted a bankruptcy exit plan after filing for Chapter 11 protection in December of last year.
Reportedly, the plan was submitted to United States Bankruptcy Court on Monday, one day before an extended deadline from the court had made it due. The plan describes how the orchestra plans to pay off its creditors, including contributions to its musicians’ pension plans, overdue rent to the Kentucky Center and two bank lenders.
Specifically, the orchestra has proposed paying the close to $43,500 it owes in contributions to the pension plans in full and paying $2,000 a month for 12 months for its use of the Kentucky Center. One lender, Chase Bank, has said that it will forgive half of its $350,000 secured claim and will take cash for the rest, and the other lender, Fifth Third Bank, will forgive most of its $155,000 secured claim.
Additionally, all unsecured creditors would receive 50 cents to every dollar they are owed under the plan. Attorneys for the orchestra said in court papers that this is the “best restructuring option available to the debtor and its creditors.”
“Any alternative, including any of which would force the debtor to remain in Chapter 11 for an extended period of time or to liquidate its assets, would seriously damage the value of the debtor’ business and could result in substantially lower recoveries for creditors,” the court papers said, according to the Wall Street Journal.
As you can see, there is hope for businesses after filing Chapter 11 bankruptcy. With the help of an experienced attorney, it is possible to come up with an effective plan to regain control over finances and become profitable once again.
Source: The Wall Street Journal, “Louisville Orchestra Files Exit Plan, Continues Union Talks,” Jacqueline Palank, 5/31/2011.
Interim president and cheif revenue officer make plans for MediaNews Group
In our prior posting titled The Denver Post owner, MediaNews Group’s President and CEO steps down, we discussed significant changes that are being made to the management and board of directors in Denver-based MediaNews Group Inc. The corporation is the owner of several newspapers including The Denver Post and has recently been reorganized under Chapter 11 bankruptcy.
As a part of the reorganization, the corporation plans to make significant changes. The interim president, Gordon Paris, and Michael Sileck, the man appointed to the newly created position of chief revenue officer are making plans for the corporation’s future success.
The plans include new ways to enhance revenue through rethinking strategies and initiatives that will assess new business opportunities. According to Sileck the new “measures will strengthen the company’s performance in its core markets, and continue the transformation of the business from a print-oriented newspaper company to a locally focused provider of news and information across multiple platforms. In addition, they will position the company to identify, pursue and execute on strategic consolidation opportunities.”
When asked whether employees at the smaller newspapers owned by the larger corporation should fear losing their jobs, Singleton made the assurance that nothing would be different in the near future for individual papers and their employees.
According to one of the remaining MediaNews board members the corporation owed “a debt of gratitude” to Singleton for his role in growing the corporation and bringing it through the 2010 bankruptcy.
Source: Denver Business Journal, “Singleton to step down as CEO of Denver Post owner MediaNews Group“, Greg Avery and Mark Harden, 1/18/11
The Denver Post owner, MediaNews Group’s President and CEO steps down
MediaNews Group Inc. is one of the largest newspaper chains and is the corporation that owns the local newspaper The Denver Post. In fact, it remains the second-largest newspaper chain after filing for Chapter 11 bankruptcy protection in the recent past.
Although last year’s Chapter 11 reorganization wiped out approximately $765 million of the corporation’s debt, the founder and CEO of the company William Dean Singleton announced this month that he will be resigning from his position. He will remain in his role until a replacement is found. The 59-year-old man plans to relinquish his dat-to-day leadership of the company that is based in Denver, Colorado.
He has relinquished his CEO responsibilities, but Singleton says that he will remain the executive chairman of the board. He plans to continue being involved in strategy and deal-making processes. “We see a lot of expansion opportunities, and it’s difficult to do both” he said when discussing his prior dual position. “We are definitely eyeing growth.”
Although Singleton has chosen to step down along with Joseph Lodovic IV, otherwise known in familiar circles as “Jody,” the two will remain in control of the company. After the reorganization, lenders such as Wells Fargo and Bank of America now own 89 percent of the corporation.
As a part of the changes, two new Alden Global executives have been added to MediaNews Group Inc.’s board of directors. “Alden is a substantial shareholder,” said Singleton. “The changes that we’ve made aligns board membership with share holdings.”
Source: Denver Business Journal, “Singleton to step down as CEO of Denver Post owner MediaNews Group“, Greg Avery and Mark Harden, 1/18/11
Eva Longoria May be a Hit, but Her Nightclub is not Sharing in Her Success
Eva Longoria, the spitfire Latina star of ABC’s television show Desperate Housewives seems to be enjoying significant success in her career, but her nightclub has not fared as well. The Las Vegas restaurant and nightclub, Beso, located at the CityCenter has experienced a noteworthy lull. The young actress owns 32 percent of the limited liability corporation, Beso that filed for Chapter 11 bankruptcy protection this past Thursday, January 6, 2011.
According to documents filed with the United States Bankruptcy Court, the corporation has tallied up approximately $5.7 million in debt and other liabilities while claiming only assets in the amount of $2.5, insufficient to cover the mounting debt.
The corporation hopes to restructure the increasing debt as a part of the bankruptcy process. Officials have estimated their future losses at $76,000 per month. The restaurant and nightclub has reportedly been struggling to pay for the rental of the space, owing more than $1.8 million to their landlord.
The actress has allegedly done her best to keep the company going, lending over a million dollars to the company. Longoria was listed in the bankruptcy documents as a creditor owed approximately $1,375,000 in legal fees and cash loans.
The nightclub’s history has been filled with controversy after a lawsuit was filed by several investors and managers against the actress, Beso and other listed co-defendants alleging that they had been improperly “pushed out” of the company after lending a substantial sum for future construction projects. The lawsuit initiated several counterclaims of mismanagement.
Source: Las Vegas Sun “Eva Longoria’s Beso files bankruptcy to restructure debt” Steve Green 1/6/11