story by Dawn McCarty
Back Yard Burgers Inc., an operator of quick-service restaurants, filed for bankruptcy protection with a pre-negotiated plan to restructure its debt.
The company listed assets of as much as $10 million and debt of as much as $50 million in Chapter 11 documents filed today in U.S. Bankruptcy Court in Wilmington.
BYB Properties, Nashville BYB and Little Rock Back Yard Burgers also sought protection. The filing doesn’t include franchise-owned locations.
“This agreement is the culmination of an ongoing plan to improve the company’s operations by restructuring debt, addressing underperforming locations and identifying opportunities for growth,” CEO James E. Boyd Jr. said today (Oct. 17) in a statement. The restructuring plan has the support of both the company’s majority owner and secured lender.
Back Yard Burgers, based in Nashville, Tenn., operates and franchises restaurants in 20 states, mainly in the Southeast region of the U.S., according to its website.
The company traces its roots back to 1987 when Lattimore M. Michael began serving homemade burgers in his Cleveland, Miss., grocery store. The first franchised restaurant opened a year later. Today, Back Yard has about 65 franchise-owned locations.
In 2007, Back Yard Burgers merged with BBAC Merger Sub Inc., a unit of BBAC LLC, in a transaction valued at about $38 million.
“Like any company in this challenging economy, we had to make the difficult decision to close underperforming locations in order to focus our resources and vision for the future on the rest of the business,” Boyd said.
The company said a review of all the company’s more than 40 restaurants resulted in the closing of 19 company-owned locations.
The bankruptcy petition was filed by Dennis Meloro, an attorney at Greenberg Traurig LLP in Wilmington.