Just three years after being purchased by a private equity firm, casual dining chain Ruby Tuesday said it filed for Chapter 11 bankruptcy protection Wednesday, attempting to cut debt and recover from a drop in customer visits due to the coronavirus pandemic.
In a filing with the US Bankruptcy Court for the District of Delaware court document, the company listed both assets and liabilities in the range of $100 million to 500 million.
Ruby Tuesday said it has reached an understanding with its lenders to support the restructuring, during which its restaurants will continue to operate, while it works to preserve the jobs of thousands of its employees.
“This announcement does not mean ‘Goodbye, Ruby Tuesday,’ Chief Executive Shawn Lederman said in a statement.
“Today’s actions will allow us an opportunity to reposition the company for long-term stability as we recover from the unprecedented impact of COVID-19.”
Social distancing and other pandemic-related curbs have put pressure on the restaurant industry, pushing companies like CEC Entertainment, the parent of once-popular children-themed restaurant chain Chuck E. Cheese, and California Pizza Kitchen to file for bankruptcies.
Founded nearly half a century ago, Ruby Tuesday was a public company till 2017 when it was sold to private equity firm NRD Capital.
In recent years, it has struggled amid an industry-wide decline in customer visits, particularly at full-service restaurants.
It closed at least 118 stores from 2017 through 2019 and the chain’s US sales dropped by 13 percent to $721 million in 2018, according to consulting and research firm Technomic.
SOURCE: New York Post