Perkins & Marie Callender’s Seeks Sale in Chapter 11 Bankruptcy
(Bloomberg) -- Restaurant operator and pie maker Perkins & Marie Callender's LLC filed for Chapter 11 protection from creditors in Delaware as it seeks to sell itself.
The company, which operates and franchises Perkins Restaurant and Bakery as well as Marie Callender's Restaurant and Bakery, owes its lenders more than $100 million. It's the second bankruptcy for the chain, which emerged from its last round of court protection in 2011.
Perkins & Marie Callender's skipped interest payments on a credit facility last year amid rising labor costs and negative sales, Chief Executive Officer Jeffrey Warne said in a court declaration.
The company has found a stalking horse bidder, Perkins Groups LLC, for Perkins and some of the company's manufacturing assets, Warne said in the declaration. The Memphis-based company is in discussions with third parties for a portion of the Marie Callender's assets and all of the manufacturing assets, he said.
Minimum Wage
Rising costs of commodities, shortages of labor and higher “statutory” wages contributed to the bankruptcy, Warne wrote. Restaurateurs have complained that state government-mandated hikes in the minimum wage have cut into their profits.
Perkins & Marie Callender's makes pies, muffin batters, cookies and other foodstuffs through its Foxtail Foods unit, which sells to both its restaurants as well as third-party restaurants and supermarkets, court papers show.
Perkins restaurants offer a menu that spans all meals, but most entrees sold are breakfast items, according to the filing.
The company has arranged for a $7.75 million bankruptcy loan, court papers show. Perkins & Marie Callender's owns, operates or franchises more than 400 restaurants in the U.S., Canada and Mexico -- most of them Perkins restaurants. It recently shut 32 locations.
Collectively, the company employs 5,379 people, about a third of them full-time.
The case is Perkins & Marie Callender's LLC, 19-11743, U.S. Bankruptcy Court for the District of Delaware.
To contact the reporter on this story: Jeremy Hill in New York at jhill273@bloomberg.net
To contact the editors responsible for this story: Rick Green at rgreen18@bloomberg.net, Nikolaj Gammeltoft
©2019 Bloomberg L.P.
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