Perkins & Marie Callender's Inc., filed for Chapter 11 bankruptcy protection on Monday and announced a restructuring plan that would ultimately give control of the company to Wayzata Investment Partners, LLC, a local private equity firm.
The Memphis-based restaurant operator listed assets of $290 million and debt of $441 million in its filing. The company said that it has entered into an agreement with Wells Fargo Capital Finance to provide $21 million in debtor-in-possession financing and will use that money, along with cash on hand, to continue operations during the restructuring.
The company is required to submit its reorganization plan by July 14 and to complete the restructuring by no later than October 21.
Once the restructuring is complete, private equity funds that are managed by Wayzata Investment Partners will hold a majority stake in the company. Holders of all of Perkins' secured notes and more than 80 percent of its unsecured notes agreed to the restructuring.
A representative at Wayzata Investment Partners could not be reached for comment. According to the company's Web site, it focuses on opportunities in undervalued debt, equity, and assets.
In the bankruptcy filing, the company said that it plans to close about 65 U.S. restaurant locations, which will eliminate 2,500 jobs-or about 20 percent of its total work force of 12,350.
Company spokeswoman Vivian Brooks told Twin Cities Business on Tuesday morning that the company has closed 58 locations so far-31 Marie Callender restaurants and 27 Perkins restaurants.
Only one Perkins location in Minnesota, 6023 Nicollet Avenue in Minneapolis, has closed as a result of the restructuring, and Marie Callender's has no Minnesota locations. Brooks said that the company now has 76 locations in Minnesota and will continue to have a strong presence here.
"Minnesota remains a stronghold for Perkins," she said.
In a press release, the company said that the continuing weak economy has hurt its business, noting that the recession and the housing price decline hit hardest in markets where the company's restaurants are most concentrated: Florida, California, and Nevada.
The Perkins and Marie Callender's restaurants operate as separate brands. Perkins, which is concentrated in Midwestern and Southeastern states, has 133 company-owned and 315 franchised restaurants. Marie Callender's, located in California and the Southwest, operates 52 company and 37 franchised restaurants.