Casual family restaurant chain Buffets LLC filed for bankruptcy protection Monday, marking the company’s third trip through chapter 11 since 2008.
The company also shut down all but two of its Colorado restaurants.
Texas-based Buffets filed for chapter 11 in U.S. Bankruptcy Court in San Antonio, listing assets of less than $50 million and debts in the range of $50 million to $100 million.
Buffets, which merged with Alamo Ovation LLC last summer, recently had more than 300 restaurant in 35 states. Like other casual eateries, however, it has suffered in recent years as cash-strapped diners cut back on eating out.
Buffet’s sales are down 22 percent this year, and the company has closed 74 eateries in the weeks prior to the bankruptcy, according to court papers. It closed another 92 stores immediately before the bankruptcy filing.
In addition to the underperforming restaurants, Buffets blamed the bankruptcy on a $11.37 million legal judgment against the company tied to a Wyoming lawsuit.
The company said in court papers that it believes it can return to profitability once it sheds its unprofitable restaurants and deals with the judgment against it.
According to the filing Monday morning, Buffets operates more than 150 restaurants in 25 states under the Old Country Buffet, HomeTown Buffet, Fire Mountain and Ryan’s brands. In addition the company owns 10 steakhouse restaurants under the Tahoe Joe’s brand. The company’s restaurants are managed by FMP SA, a Texas-based operator of independent eateries based in Hollywood Park, Texas.
The company, which does business as Ovation Brands, last month shut down three of nine Country Buffet restaurants in Colorado. On Sunday, four more were shuttered, leaving only locations in Colorado Springs and Denver’s Stapleton neighborhood open.
Buffets owes its senior lenders $46.2 million and has pledged all its collateral to secure the loans. Alamo Ovation, Buffets Restaurant Holdings and Buffets Holding—none of which have filed for bankruptcy—have guaranteed the loans. The company also has more than $60 million in unsecured debt.
