Buffets Inc. files for Chapter 11 bankruptcy, again

Buffets Inc. which operates 500 restaurants nationwide announced Wednesday that they are filing for Chapter 11 bankruptcy for the second time in four years.

Buffets Inc. runs The Old Country Buffet, Hometown Buffet, Ryan’s, Granny’s
Buffet and Fire Mountain brands. They plan to close 81 restaurants nationwide, but have not announced which locations.

Buffets Inc. is seeking relief to recapitalize the company and shed some of its $245 million debt, according to Reuters. They will receive a $50 million dollar loan, known as debtor-in-possession, from DIP finance to operate while under bankruptcy protection.

Buffets Inc. sought out a bankruptcy attorney to file for Chapter 11 in 2008 and emerged form the process a year later.

Since this is the second bankruptcy for Buffets Inc. it is referred to as Chapter 22. Recently, Hostess, makers of Twinkies, filed for Chapter 11 bankruptcy for a second time.

A bankruptcy lawyer will recommend Chapter 11 to a business that needs to reduce its debt but wishes to continue operations.

The rising prices of food and other commodities have caused many businesses to struggle financially. In 2011, numerous restaurants filed for bankruptcy including Hostess (mentioned above), Sbarro, and Giordano’s, infamous Chicago pizza chain, just to name a few.

The tough economic times affects businesses and individuals alike. There are a number of bankruptcy structures that can reduce or eliminate debt. A bankruptcy attorney can help when debts become overwhelming.