(Bloomberg) – Hooters of America is working with creditors on a plan to restructure the company in the coming months by bankruptcy court, according to people with knowledge of the schemes.
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The informal dinner chain works together with law firm Ropes & Gray to prepare an application, said that the people who added that the plans are not final and have not been asked not to be identified about private preparations. The legal process would probably start in the next two months, the people said.
The company, known for its poor server uniforms and Double Entendre Uilmascotte, worked to tackle his debt tax with his lawyers and by Turnaround Advisors from Boetiekbedrijf Accordeon partners, Bloomberg reported earlier. Some Debtolders from Hooters have Houlihan Lokey Inc. demonstrated for advice.
Representatives of Hooters, Accordion Partners and Ropes & Gray did not respond to requests for comments. A representative for Houlihan refused to comment.
Hooters has had to deal with liquidity problems because the foot traffic has decreased and has closed various locations. The chain sold around $ 300 million in bonds supported by assets in 2021, according to data collected by Bloomberg.
The bonds supported by assets are packaged as securitizations for the entire company value a company a company promises most of its assets, including franchise costs, as collateral and a product that is popular with restaurant chains, fitness clubs and other companies with franchise stores.
Casual eating chains have come under pressure such as inflation, disruptions of the supply chain and higher interest costs increased menus prices, so that consumers are less interested in eating out. According to bankruptcy data, more than a dozen large restaurants or franchisees last year asked bankruptcy protection last year.
Restaurant prices rose by approximately 44% from 2015 to March 2024, according to the data company Black Box Intelligence, compared to an increase of 26% for groceries in the same period.
-With help from Dorothy Ma and Jonathan Randles.
(Updates to add context about the informal food industry in the eighth and ninth paragraphs.)
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