NEW YORK (AP) - Restaurant owner Perkins & Marie Callender's Inc. on Monday filed for Chapter 11 bankruptcy protection, brought down by tough competition, the weak economy and rising food costs.
The owner of the Perkins Restaurant & Bakery and the Marie Callender's chains said in the filing it plans to shutter 65 stores and cut 2,500 jobs, or about 20 percent of its work force of 12,350.
The company cited the weak economic climate, particularly in Florida and California, where many of its restaurants are located, for the bankruptcy filing.
Documents filed with the United States Bankruptcy Court in Delaware indicated the company could not afford to build new restaurants and upgrade existing ones, so it lost traffic to better funded restaurant competitors.
The two chains were "adversely affected by the languishing economy, including declines in consumer confidence and sluggish consumer spending and increased commodity costs," CEO J. Trungale said in a statement in November, following its most recent quarterly earnings filing for the period ended Oct. 3, 2010.
Food costs have increased since then, pressuring food makers and restaurant chains alike.
The Memphis, Tenn., company had assets of about $290 million and liabilities of $440.8 million, according to the bankruptcy filing. Top creditors include The Bank of New York Mellon Trust and law firm Gibson Dunn & Crutcher LLP.
The company has 160 owned and 314 franchised Perkins restaurants and 85 owned and 37 franchised Marie Callender's.
Perkins & Marie Callender's also runs a baker goods manufacturing division, Foxtail Foods, which makes pies, pancake mix and other items for its in-store bakeries and third-party customers.
Perkins, now owned by New York-based investment firm Castle Harlan Inc., was founded in 1958 and combined with Marie Callender's in 2006.