Wednesday, July 20, 2011
Perkins Restaurants to Emerge from Bankruptcy in the Fall
In June, Perkins and Marie Calendar’s Inc. filed for Chapter 11 Bankruptcy. The company, which owns or franchises 600 restaurants nationwide, closed about 65 restaurants prior to filing and is continuing to evaluate locations to weed out any poor performers.
The company blamed the suffering economy and increased costs of food like dairy and eggs as well as increased labor and benefit costs for its predicament. In its Chapter 11 petition, Perkins listed its total assets at $290 million while its total liabilities soared at $440.8 million.
Perkins has begun its restructuring and plans to exit bankruptcy in the fall in a significantly financially strengthened position. Its restructuring plan would place the company under the control of Wayzata Investment Partners LLC, a private-equity firm based in Wayzata, Minnesota that is the leader of unsecured note holders. Perkins would also emerge with $35 million to get back on its feet, replacing the company’s current $21 million debtor-in-possession credit line. While the plan has Wayzata’s support, creditors must cast their votes and a judge must approve it before it can proceed. Perkins hopes to win court approval in August.