The parent company of the popular Perkins chain of eateries went into bankruptcy Monday, and when its finances are fixed it will be majority-owned by Wayzata Investment Partners.
Memphis-based Perkins & Marie Callender's said it's filing Chapter 11 bankruptcy, hurt by a continuing weak economy, particularly in Florida, Nevada and California, where many of its restaurants are located.
Perkins and Marie Callender's operate as separate brands, with the former having a big presence in the Midwest and Southeast, and the latter in California and the Southwest. There are 133 company-owned Perkins and 315 franchised Perkins outlets.
Perkins & Marie Callender's, owned by New York-based investment firm Castle Harlan Inc., said in bankruptcy filings that it will close 65 stores and cut 2,500 jobs, or about 20 percent of its workforce. There are 76 Perkins restaurants in Minnesota; the company didn't say if any of them will be closed.
Wayzata-based Wayzata Investment Partners, which is known to invest in distressed companies, declined to comment.
Bankruptcy court documents indicate that Perkins & Marie Callender's couldn't afford to build new restaurants and upgrade existing ones, so the company lost business to competitors with deeper pockets.
Through a prearranged bankruptcy, Wells Fargo Capital Finance will provide $21 million in debtor-in-possession financing. Chapter 11 allows a company to restructure its finances while remaining in operation, shielded from creditors.
With the restructuring, Perkins & Marie Callender's senior secured noteholders will agree to a two-year maturity extension. Unsecured creditors will convert their claims into 100 percent of the equity of the new company.
Wayzata Investment Partners, a spinoff of a former Cargill subsidiary, is also a major stockholder in the Star Tribune.
Perkins & Marie Callender's plans to complete its restructuring no later than Oct. 21.
The Associated Press contributed to this story. Mike Hughlett • 612-673-7003
