American Blue Ribbon Holdings LLC, parent to the Village Inn and Bakers Square brands, filed for Chapter 11 reorganization Monday, closed 33 locations and will look at strategic options, the company said.
The Nashville, Tenn.-based company, which filed its petition in U.S. Bankruptcy Court of Delaware, said it had arranged for debtor-in-possession financing of $20 million from its majority equity owner, Cannae Holdings Inc., to support the filing and its reorganization plan for the family-dining brands.
American Blue Ribbon Holdings said the filing did not involve or affect the operations of O’Charley’s LLC or 99 Restaurants LLC,, which are owned by Fidelity Newport Holdings and not part of American Blue Ribbon Holding LLC.
“The company believes the reorganization will facilitate the company’s Village Inn and Bakers Square restaurant brands evolution to a healthy core of restaurants and support an approach to the brands that is most beneficial for all stakeholders,” American Blue Ribbon Holdings said in a statement. “As part of the reorganization, the company will explore a variety of strategic and structural initiatives to best position the company for success in the future.”
American Blue Ribbon Holdings said its Legendary Baking LLC division, which manufactures pies, will continue operations and, with the debtor-in-possession financing, will conduct business “without interruption.”
“The company’s financial trends have been negative since 2017 as the restaurant operations struggled with declining sales and acceptable margins,” the company said. “Those challenges are similar to others in the industry particularly as it relates to higher wage rates.”
The company said that in 2019, “in order to fund operating losses, the company closed and sold its support facility in Denver, closed and sold three fee-simple restaurant properties, and accelerated collections of Legendary Baking’s receivables, which were all one-time sources of cash flow.”
However, the company said expectations for 2020 were continued losses.
“Accordingly, the company filed the bankruptcy and closed 33 underperforming stores, obtained post-petition financing that will provide sufficient liquidity for the company to fund operations during the case; and will explore its strategic options to create a healthy foundation for optimizing the performance of the businesses while under the protection of the bankruptcy code,” the company said.
In 2008, the then-parent of Village Inn and Bakers Square, Vicorp Restaurants Inc. of Denver, filed for bankruptcy protection. Vicorp's assets were sold in March 2009 to American Blue Ribbon Holdings LLC, formed by Fidelity National Financial Inc. of Jacksonville, Fla., and Newport Global Advisors of The Woodlands, Texas.
The company established a toll-free line team members, customers and suppliers to address any questions at (833) 991-1558.
American Blue Ribbon Holdings LLC is owned by ABRH LLC. Its operations include 159 Village Inn restaurants, with 75 company-owned locations and 84 franchised units, and 22 company-owned Bakers Square locations. It also owns Legendary Baking with two manufacturing facilities and more than 75% of sales to third-party customers.
Village Inn, founded in Denver in 1958, has restaurants in the Rocky Mountain region, the Midwest, Arizona and Florida. Bakers Square, founded in Des Moines, Iowa, more than 40 years ago, has locations in the Midwest.
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