Ruby Tuesday filed a petition under Chapter 11 on Wednesday in Delaware, saying it needed the protection of bankruptcy to address financial problems caused in part by the COVID-19 outbreak.
Based in Tennessee, Ruby Tuesday had already closed almost 300 restaurants in 3 years. It also piled up $43 million in debt notwithstanding another $19 million owed to landlords and other creditors.
Ruby Tuesday’s CEO called the filing “an opportunity to reposition the company for long-term stability as we recover from the unprecedented impact of COVID-19,” which is a typical plan for chapter 11 bankruptcy protection seekers. The company still operates over 200 locations.
MSN reports “Prior to this year, Ruby Tuesday suffered a decline in sales due to a major shift in consumer attention from casual dine-in restaurants to fast food and fast casual options. Then once the pandemic hit, their bottom line was further affected by closures of dine-in businesses. Although the chain’s delivery business grew by 450% during this time, the transition away from a dine-in model wasn’t as smooth as that of other restaurants with well-established delivery operations.”
It remains to be seen whether Ruby Tuesday can emerge with a plan to make the casual dining chain relevant again.
If you are a creditor of a Chapter 11 debtor like Ruby Tuesday, or need other bankruptcy representation, please call us at (804) 423-1382.
