Logan’s Roadhouse Has Filed Bankruptcy
Last week, the restaurant chain Logan’s Roadhouse filed for Chapter 11 bankruptcy. Though the chain is based in Nashville its bankruptcy filing was in Delaware, where it is incorporated. Recently, Logan’s has struggled with competition from other casual dining restaurants, falling sales, and rising labor and food costs.
There are more than 250 Logan’s Roadhouse locations in 23 states. 26 of those locations are franchised. The restaurant is known for its steaks, yeast rolls, and bottomless buckets of in-shell peanuts.
Between January 2016 to June 2016, sales at Logan’s declined by about 4% and customer traffic fell by 8.8 percent. In a statement, Logan’s said that its CEO, Sam Borgese, will leave the company. Borgese was named CEO in October of 2014. It is unclear when a replacement CEO will be named.
The chain has plans to restructure as well as close 18 of its locations. “The company will be closing 18 underperforming restaurants as part of the overall efforts to improve the company’s financial performance. A plan is in place to assist employees in closing restaurants, reassigning employees to other Logan’s restaurants and providing them with outplacement services and assistance with applying for jobs,” according to a statement issued by the restaurant. According to court filings, Logan’s has 18,964 employees at its company owned locations, including 1002 full time workers.
Logan’s has around $416 million in mostly secured debt, with an approximate 25,000 creditors. Its assets are estimated to be between $100 million and $500 million. The chain noted that it has secured up to $25 million in bankruptcy financing and has support for its restructuring plan from lien holders and bondholders. The bankruptcy financing will keep Logan’s operational while in bankruptcy. According to bankruptcy court filings, the reorganization will reduce debt by over $300 million dollars and will also give bondholders equity in the company.
If, like Logan’s Roadhouse, you or your business are struggling, please get in contact with one of our offices and set up a free consultation to discuss what options are best for your situation.