WEST PALM BEACH Fla. The bankrupt Roadhouse Grill is closing its remaining 20 company stores after a loan fell through, leaving it unable to bring its leases current.
Roadhouse Grill, which filed for bankruptcy for the second time last October, told the bankruptcy court that it would have to shut down all locations because a $1.3 million loan from MCF Development LLC did not come through on time.
''There remains no ability for the debtor to continue operations as the debtor's only asset was the remaining 20 leased stores,'' Roadhouse Grill said in court filings.
The bankruptcy court trustee for the company won court approval this week to liquidate the company and is asking permission to abandon capital equipment in the restaurants, saying it would cost more to sell it.
Several Roadhouse Grill restaurants in Florida and New York were shuttered suddenly this week, shocking employees and customers, according to local reports.
Some reports indicated that some franchised stores were still open.
Roadhouse Grill was founded in 1992 and had approximately 85 restaurants at its peak. The company was put into involuntarily Chapter 11 bankruptcy on Jan. 18, 2002, by one of its landlords, CNL Restaurant Properties Inc., which was owed $5 million in overdue rent. Three months later, the involuntary case was converted into a voluntary Chapter 11.
The company's financial woes at that time were blamed on expanding too quickly and on the slowdown in casual dining after the Sept. 11, 2001, terrorist attacks.
Roadhouse Grill exited bankruptcy on Sept. 30, 2002, but the company began losing money again when several of its restaurants suffered after Florida was hit by three hurricanes in 2004.
Last April, Duffy's Holdings, the operator of Duffy's Sports Grill restaurants, bought 85.5 percent of Roadhouse Grill owner RHG Acquisition Corp. for about $29 million. In October, however, Duffy's sold its stock to Willie's Roadhouse Grill LLC after it said that it found Roadhouse Grill's deteriorating financial condition to be far worse than it had anticipated.
Willie's Roadhouse Grill's managing member is John C. Metz, a Florida-based Denny's and Bennigan's franchisee, who put the Roadhouse Grill chain into bankruptcy shortly after purchasing the stake. Metz could not be reached for comment as of press time.
Roadhouse Grill is based in West Palm Beach, Fla.