Ruby Tuesday file for chapter 11

Ruby Tuesday has filed for the reorganization of Chapter 11 in the United States Bankruptcy Court for the District of Delaware. The casual restaurant chain cited the impacts of the COVID-19 pandemic.

In a statement, the company said it has reached an understanding with secured lenders to support its restructuring.

“This announcement does not mean ‘Goodbye, Ruby Tuesday,'” said CEO Shawn Lederman. “Today’s actions will give us the opportunity to reposition the company for long-term stability as we recover from the unprecedented impact of COVID-19. With this pivotal step in our long-term financial health transformation, this is ‘Hello’, for a stronger Ruby Tuesday. “

In October 2017, the restaurant chain was sold for $ 2.40 per share, or $ 146 million, to a fund managed by private equity firm NRD Capital. It at least 118 stores closed between 2017 and 2019. In 2018, its sales dropped 13% to $ 721 million, according to research firm Technomic.

In recent months, he has been negotiating leases and loan agreements, reducing costs. During the summer, you stopped paying pensions to some employees. She has reportedly defaulted on her debts in the two quarters before COVID-19-related restaurant closures began in March. It moved to expand delivery and takeaway options and launch virtual kitchens, but seated meals accounted for more than 90% of its sales.

In his court statement, Lederman said the company was permanently closing 185 restaurants that had closed during the pandemic and 7,000 of its 7,300 employees were laid off. It listed assets and liabilities ranging between $ 100 million and $ 500 million. With the closures, it will have 236 company-owned and operated locations, as well as an unknown number of locations managed by 10 franchisee groups.

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