Logan’s Roadhouse May Soon File for Chapter 11 Bankruptcy

by San Antonio Attorney

Logan’s Roadhouse Inc., a chain of restaurants founded in Kentucky, is reportedly getting ready to file for bankruptcy.

The restaurant chain may file for Chapter 11 this month, though the plan may still change as nothing is final yet.  Logan’s, which uses the catchphrase “Where Steak Rules the Road,” has 250 locations in 26 states.

After the filing, the company will announce that it will not pay its financial obligation due last April and intended to put off filing yearly and quarterly reports of earnings.  Since Logan’s is having problems making payments, it also made a forbearance agreement with lenders and it will end on Aug.  15.

The chain of restaurants has experienced waning sales, which is the reason why they are giving a lot of discounts.  A number of casual-dining rivals, like Buffalo Wild Wings and Applebee’s, also have experienced the same problems.  In addition, fast food restaurants are making it hard for restaurants like Logan’s because they serve quickly and use fresh ingredients.

To get more customers, Logan’s started offering Southern-inspired dishes, like shrimp-and-grits fritters and smoked beef brisket, on top of happy hour specials.  But the marketing strategy hasn’t brought improvement in the sales.

Logan’s was founded in Lexington, Kentucky about 25 years ago.  The restaurant chain was acquired by Cracker Barrel Old Country Store Inc. in 1999 and was sold to investment firms in 2006.  In 2010, the Logan’s agreed had a new owner, Kelso & Co.

Standard & Poor’s Ratings Services downgraded in March the restaurant chain’s liquidity appraisal to weak, citing waning foot traffic as one of the reasons of it liquidity erosion.  The change followed after it was announced that Logan’s was discussing with stakeholders concerning strategic options to reduce debt and increase liquidity.  After missing the interest payments in April, the company’s rating was downgraded even further.

Leave a Comment

Previous post:

Next post: