Loading…
Saturday, July 12, 2014
Current Weather
Loading Current Weather....
Published: Wednesday, 10/5/2011

Friendly's files for Ch. 11 bankruptcy protection, closes 63 stores

BY MAE ANDERSON
AP RETAIL WRITER

NEW YORK — The parent of the Friendly's restaurant chain filed for Chapter 11 bankruptcy protection on Wednesday and said that it has already closed 63 of its stores. Each store employed about 20 people, so about 1,260 jobs were lost.

The 76-year-old company known for its ice cream and hamburgers is the latest restaurant chain to file for bankruptcy, as consumers continue to eat out less, a habit they picked up during the recession, and food costs remain high.

Other companies that have sought bankruptcy protection this year include Perkins&Marie Callender's; Real Mex, which operates El Torito Restaurant and Chevys Fresh Mex, and SSI Group Holding Corp., which operates Souper Salad and Grandy's restaurant.

Friendly's said the economic downturn coupled with higher costs and high rents drove it to file for bankruptcy protection.

"The strategic decision to pursue a financial restructuring will allow us to proactively and quickly improve our financial position," said CEO Harsha V. Agadi.

Friendly Ice Cream Corp., based in Wilbraham, Mass., says it has secured $70 million in financing and that its 424 remaining restaurants will stay open and pay employee salaries and benefits as it reorganizes under bankruptcy protection. Gift cards will continue to be honored. Friendly's now employs about 9,000 workers.

Its current owners, Sun Capital Partners, will be the lead, or "stalking horse" bidders, in an auction process.

The company filed for bankruptcy protection at the United States Bankruptcy Court for the District of Delaware.



Guidelines: Please keep your comments smart and civil. Don't attack other readers personally, and keep your language decent. If a comment violates these standards or our privacy statement or visitor's agreement, click the "X" in the upper right corner of the comment box to report abuse. To post comments, you must be a Facebook member. To find out more, please visit the FAQ.



Poll