A casual dining chain with more than dozen restaurants in South Carolina has joined the lengthy line of customer-facing businesses that have filed for bankruptcy during the COVID-19 pandemic.
The parent of Ruby Tuesday announced Wednesday that it is seeking protection from creditors and that its secured lenders have “reached an understanding” to support a proposed financial restructuring “that will provide a sustainable path forward” for the company.
CEO Shawn Lederman cited a famous Rolling Stones song in a letter to customers and vendors.
“This announcement does not mean ‘Goodbye, Ruby Tuesday’ but ‘Hello, to a stronger Ruby Tuesday,'” he wrote.
Lederman said the goal of the restructuring is to reduce debt “and reposition the company to emerge a stronger organization built for the future.”
“We intend to move through the process as quickly as possible,” he said.
He said all restaurants that are currently open for business remain open and that gift cards and customer loyalty programs remain valid.
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In a sworn declaration to the U.S. Bankruptcy Court, Lederman said 185 locations that were temporarily shuttered will be shut down permanently as part of the reorganization, or about one-third of the total. The sites were not immediately disclosed.
Ruby Tuesday has struggled in what Lederman called “an increasingly competitive and challenging business environment” ever since its sale to NRD Capital in 2017.
“Despite multiple efforts to address the situation, the company ultimately has not been able to overcome the difficulties from the overall decline in the casual dining sector, greatly exacerbated by regulatory responses to contain the COVID-19 pandemic,” he said.
The health crisis and ensuing economic lockdown has forced numerous other large companies that rely on walk-in business to file for bankruptcy protection this year, including J.C. Penney and J.Crew. Restaurant chains that have have turned to the court system to lighten their debt loads include Golden Corral’s largest franchise operator, Chuck E. Cheese and California Pizza Kitchen.
Ruby Tuesday opened its first restaurant near the University of Tennessee’s main campus in Knoxville in 1972.
In South Carolina, the chain’s website shows 13 locations in the Charleston region, the Midlands, the Upstate, the Pee Dee and Myrtle Beach.
The parent of Ruby Tuesday announced Wednesday that it is seeking protection from creditors
Contact John McDermott at 843-937-5572 or follow him on Twitter at @byjohnmcdermott