This blog discussed the Logan’s Restaurant business bankruptcy filing earlier this year and the option for struggling businesses to utilize the commercial bankruptcy process as a way to return to profitability. Logan’s Roadhouse restaurant chain, headquartered in Tennessee, recently announced that it is emerging from business bankruptcy. Following the commercial bankruptcy process, the restaurant chain is now smaller and has less debt.
When the company filed for business bankruptcy earlier this year, facing a decline in customers and sales, it had $400 million in debt, but has now emerged from the bankruptcy process with sharply reduced debt of a little over $100 million. The business bankruptcy process allowed the struggling company to reduce its interest expenses. The process also allowed the company to re-negotiate leases at a savings of $4 million. Following the bankruptcy, the company has 195 company-run restaurants and 26 franchise locations across 20 states.
A representative helping to lead the turnaround effort for the company noted its expected bright future, committed management and unified vision moving forward. It streamlined operations, revised its menu, began marketing efforts focused on certain products and is focusing on recruiting, training and retaining workers. Business bankruptcy options, such as a Chapter 11 reorganization bankruptcy, allow a struggling business to reorganize its operations, restructure its debts, renegotiate leases and conduct other activities, with the guidance of the bankruptcy court, to get back on its feet.
There are different options to consider when faced with business struggles, and the Chapter 11 bankruptcy process is one to consider. It can lead to a more positive future for a struggling business than may otherwise have seemed possible.
Source: Nation’s Restaurant News, “A leaner Logan’s Roadhouse emerges from bankruptcy,” Jonathan Maze, Dec. 1, 2016