American Blue Ribbon Holdings LLC, the operator of the restaurant chains, filed for Chapter 11 protection in U.S. Bankruptcy Court in Wilmington, the newspaper reported. The filing comes after the Nashville, Tennessee-based company said it closed 33 locations and laid off 1,130 employees nationwide.
Both restaurants are noted for pies, desserts and breakfast menu items.
American Blue Ribbon said it would seek to reorganize in Chapter 11 and “will explore a variety of strategic and structural initiatives to best position the Company for success in the future,” according to court documents.
The company still runs 97 restaurants in 13 states and has another 84 franchises. American Blue Ribbon said it employed 1,500 full-time workers and more than 3,000 part-time workers, The Wall Street Journal reported.
In a news release Monday, American Blue Ribbon said it filed bankruptcy documents and will restructure under “a healthy core of restaurants.” The company said it is looking at “a variety of strategic and structural alternatives to best position the company for success in the future.”
American Blue Ribbon said it had operating losses of $11 million during the 2018 fiscal year 2018 and $7 million in 2019, The Wall Street Journal reported.
Kurt Schnaubelt, American Blue Ribbon's chief financial officer, said in a declaration filed in court that the company solicited Chapter 11 loans from other lenders but said no other parties they discussed financing with were interested in funding the bankruptcy even though the company had no secured debt encumbering its assets. Blue Ribbon has about $14 million in unsecured debt, court papers said.
According to court documents, American Blue Ribbon has $14 million in unsecured claims, including unpaid rent and litigation claims, according to Restaurant Business.