Old Country Buffet parent company files for bankruptcy; local restaurant stays openMinnesota-based Buffets Inc., parent company of Old Country Buffet, filed for bankruptcy for a second time Wednesday and will close 81 restaurants.
By: Mike Creger, Duluth News Tribune
Minnesota-based Buffets Inc., parent company of Old Country Buffet, filed for bankruptcy for a second time Wednesday and will close 81 restaurants.
Duluth’s restaurant will remain open, as will most Minnesota locations, Duluth kitchen manager Scott Limoseth said.
“Business as usual,” he said after learning about the restructuring in the morning.
Buffets, of Eagan, Minn., reached an agreement with lenders holding 83 percent of its $245 million in debt with a promise to revitalize its restaurants.
“Today’s announcement marks the beginning of a new era for Buffets,” CEO Mike Andrews said. “We will recapitalize our balance sheet, eliminate a burdensome debt load and increase our cash flow, which in turn will strengthen our ability to invest in the improvement of our restaurants.”
Buffets filed for bankruptcy in 2008 and emerged from it a year later. This time around, lenders will receive stock in the company after forgiving loans. Buffets plans to have its finances fully restructured in six months.
The 81 closures will be underperforming restaurants, Buffets reported in a news release. Limoseth said the Duluth Old County Buffet is a profitable business.
The immediate closures represent 16 percent of 494 restaurants across the country with 28,000 employees. Buffets calls itself the nation’s largest steak-buffet restaurant company with restaurants in 38 states. Its restaurants fall under the names Tahoe Joe’s Famous Steakhouse, Old Country Buffet, HomeTown Buffet, Ryan’s and Fire Mountain.