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The flagship Marie Callender’s restaurant – Callender’s Grill on Wilshire Boulevard at Curson Avenue – will remain open while its parent company, Perkins and Marie Callender’s Inc., goes through chapter 11 bankruptcy.
On June 13, Perkins and Marie Callender’s Inc. announced the closure of 58 restaurants: 31 Marie Callender’s and 27 Perkins’.
“This initial round of store closings was arrived at following store level analyses of historical financial performance, local market conditions, and cost structure,” said Jay Trungale, chief executive officer of Perkins, in a statement released by the company. “The process to identify underperforming locations remains ongoing and will continue throughout the chapter 11 case. With the support of our secured and unsecured noteholders, we will continue to work to complete our restructuring process as soon as possible and emerge in a strengthened financial position that will allow us to more effectively compete and achieve long-term success.”
In California, 13 Marie Callender’s will close their doors, including the restaurant at 6081 Center Drive in West L.A.
“They’ve been a landmark in the community for more than twenty years and we’re certainly glad it appears that that Callender’s Grill will remain open to serve the needs of the community,” said Steve Kramer, president of the Miracle Mile Chamber of Commerce said.
The company emphasized that the closings were necessary in order to put it on firmer financial ground during the reorganization process.
The company agreed to a restructuring support agreement, which requires the company file a reorganized plan by no later than July 14 and complete restructuring by Oct. 21, 2011.
On June 14, the company entered into an agreement with Wells Fargo Capital Finance to provide the company with a $21 million debtor-in-possession financing, of which the company will have access to $16 million to maintain business as usual during the restructuring.
“Our restaurant operations will not be impacted by the restructuring and our customers will continue to receive the highest quality products and dining experience they have come to expect from our restaurants,” Trungale said. “We greatly appreciate and recognize the support of our employees, customers, vendors and strategic partners whose support is vital to our success.”
The company believes its current and anticipated cash resources will be suitable to pay its expenses and maintain its business operations during the restructuring.
After the completion of the restructuring process, the company will be majority controlled by private investment funds managed by Wayzata Investment Partners LLC.
Perkins, which is centrally located in midwestern and southeastern states, has more than 133 company-owned restaurants and 315 franchised locations. Marie Callender’s, based in California, operates more than 52 company and 37 franchised restaurants.
“You have people economizing who don’t go out to eat every day or evening,” said Dick Messer, owner of Johnny Rocket’s at the Petersen Automotive Museum. “Marie Callender’s has been around a long time and the way it looks, they are still doing pretty well.”
Messer said restaurants in and around Museum Square derive a majority of their business from the lunch crowds at the office buildings and museums, but since food trucks have started parking in the area, the Miracle Mile restaurants have taken a hit to their bottom lines.
“These guys just pull over and park at the curb and start serving the food,” Messer said. “Why is the city allowing this to go on?”
Messer questioned many of the trucks’ sanitary processes and licenses, as well as the city’s willingness to allow the vehicles to park so close to brick and mortar restaurants that are forced to undergo very strict inspection guidelines.
“It’s a bunch of pirates with no authority, no attachment to anybody,” Messer said.
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