Logan’s Roadhouse Inc. has filed for bankruptcy, and CEO Sam Borgese will leave the company, Logan’s said Monday.
Logan’s also plans to close 18 underperforming restaurants as part of a plan to improve its financial performance. The chain has 256 units.
In a statement, the Nashville, Tenn.-based company said that it filed under a “consensual plan” between its owners, debt holders and bondholders. Logan’s plans to restructure its balance sheet and provide enough capital to fund a turnaround.
“The company’s owners, lenders, bondholders, board of directors and senior management are committed to ensuring the company’s future growth and success, and today’s filing is simply a necessary step to achieve those goals,” Logan’s said in a statement.
Logan’s named Borgese CEO in 2014. The company did not name a replacement, but said that it “is focused on continuing to develop and build the team to ensure a successful and quick turnaround of the brand.”
Logan’s said in the statement that its owners, directors, management and lenders are funding up to $25 million to support the chain through bankruptcy.
The casual-dining operator has been expected to file for debt protection since reports indicated that it was preparing a filing. The chain has struggled with heavy debt and falling sales.
Logan’s has delayed filing public earnings statements with the Securities and Exchange Commission for the past two quarters. But according to a third-quarter report filed last year, the company had a net loss of $24.4 million and an operating loss of $12 million, along with a same-store sales decline of 4.3 percent and falling traffic of 7.4 percent. It also reported $391.4 million in long-term debt and $12.9 million in cash.
Logan’s filing is the third restaurant chain bankruptcy this year, and the fourth since last November, following Quaker Steak & Lube, which has since been sold to TravelCenters of America. In addition, buffet operator Buffets LLC filed for credit protection earlier this year, and Johnny Carino’s filed for bankruptcy in July.