Not every business in Tennessee will see financial success, especially those in the cutthroat restaurant industry. For example, the company that owns the restaurants Perkins and Marie Callender, along with Foxtail Foods which supplies baked goods for these chains has filed for bankruptcy, despite a recent increase in sales. The company has $115 million in secured debt, and experienced financial troubles in 2017 and 2018 due to declining sales and rising labor and commodity costs. And although as of June Perkins' sales increased 5.1 percent, it was not enough to prevent the company from filing for bankruptcy, although this stabilization may make restructuring an option.
The company is looking to break up the restaurant chain via a sale. According to bankruptcy court filings, a company called Perkins Group LLC is looking to purchase the Perkins restaurants and a portion of Foxtail Food assets, although a higher bidder could wind up purchasing this chain. Currently Perkins Group LLC is offering $40 million in cash for the chain.
Business and commercial bankruptcy filings and reorganization plans can be very complex. Through a Chapter 11 bankruptcy, a business reorganization plan can be executed. Sometimes this allows a business to keep its doors open, if it can still meet the financial obligations as agreed-upon in the Chapter 11 reorganization plan. In addition, once a business files for Chapter 11, the threats of repossession and foreclosure are stopped.
When a business is drowning in debt, it is a very serious situation. However, just because a business is in financial trouble doesn't always mean it must close its doors. A Chapter 11 bankruptcy filing may be a means for a company to sell assets or restructure itself in a way that allows it to overcome its unpaid debts while remaining operational.