Nashville-based restaurant chain Logan’s Roadhouse filed for Chapter 11 bankruptcy protection Monday with plans to restructure its operations and close 18 locations.
Logan’s said in a statement that its CEO, Sam Borgese, will leave the company, but it was not immediately clear when a replacement would be identified.
The steak and Southern-inspired casual dining chain said that it had secured support for its restructuring plan from its first-lien lenders and bondholders and landed up to $25 million in bankruptcy financing.
The company’s “customers continue to face pressure on discretionary income, directly correlating to depressed restaurant sales and reduced customer traffic,” Logan’s chief restructuring officer Keith Maib said in a court filing.
Logan’s has 18,964 employees, including 1,002 full-time workers, at its 234 company-owned locations, according to a court filing. The company has 26 franchised restaurants.
“A plan is in place to assist employees in closing restaurants, reassigning employees to other Logan’s restaurants and providing them with outplacement services and assistance with applying for jobs,” Logan’s said in a statement.
Logan’s has about $416 million in debts, almost all of which is secured, according to a court filing.
The company posted $606.4 million in revenue in 2015 and a loss of $112 million before earnings, interest, taxes, depreciation and amortization, including one-time restructuring charges.
Founded in Lexington, Ky., in 1991, the company went public in 1995 and was sold to the Cracker Barrel chain in 1999.
LRI Holdings bought the company in 2006. LRI is currently controlled by Kelso & Co., according to a court filing.
The owners completed a debt exchange in 2015 in a move that eliminated $18.5 million in annual debt payments, but it was insufficient. Foot traffic fell by 8.8% in the first half of 2016 and sales fell 4%.
Source: Nathan Bomey and Kirk Bado, USA TODAY and The Tennessean