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By stan_sipple

Old Country Buffet's parent company files Chapter 11 reorganization and will close some St Louis-area restaurants. St Louis Business Journal.Buffets Holdings Inc., parent company of Old Country Buffet, announced Tuesday that it has filed for Chapter 11. Eagan, Minn.-based Buffets has 626 restaurants in 39 states, including 615 buffet-style restaurants under the Old Country Buffet, HomeTown Buffet, Ryan's and Fire Mountain names, and 11 Tahoe Joe's Famous Steakhouse steak-buffet restaurants. The privately held company also has 16 franchised locations in six states. Buffets has 10 restaurants in the St. Louis area, according to its Web site. All of the Buffets' restaurants will remain open and staff will be paid as usual, the company said. Group reservations and all customer programs and policies, including coupons and gift cards, will remain in effect. "We intend to use these reorganization process to make the company stronger and more financially secure as we continue to contend with the current challenging operating environment," Buffets CEO Mike Andrews said. "This restructuring is driven primarily by the need to reduce the amount of debt on our balance sheet." To fund its continuing operations, Buffets has secured a $385 million debtor-in-possession financing facility from several financial institutions in its bank group. The credit facility includes $85 million in new funding and $300 million carried over from the company's pre-petition credit facility. Buffets' legal adviser is Wilmington, Del.-based Young Conaway Stargatt & Taylor. Its financial advisors are Houlihan Lokey Howard & Zukin Capital Inc. and Kroll Zolfo Cooper, both based in New York. Old Country Buffets operator Buffets Holdings Inc. shut down 51 of its restaurants on Feb. 10 and Feb. 11, including three in the St. Louis area, and laid off between 2,200 and 2,300 workers nationwide. In a regulatory filing Wednesday with the Securities and Exchange Commission, the company said on Feb. 7 it approved shutting down 52 "underperforming" restaurants in 23 states. All but one have already been closed. The closings will result in a charge of about $10.5 million, of which $1.8 million would be in cash. In addition, Buffets said that its creditors would delay a scheduled hearing regarding a new bankruptcy financing. Buffets had hoped to borrow $385 million to keep it running during reorganization, according to a filing in U.S. Bankruptcy Court in Delaware, but some of its creditors objected, saying that they hadn't had time to review the plan. It would use $300 million to pay off debts. Around 17 of the company's creditors objected to the new loans

Full post as published by Showmeblawgs on February 17, 2008 (boomark / email).