Another famous dining chain has officially filed for Chapter 11 Protection and is closing 77 locations across the country. The past year has not been very profitable for many food chains in the country. Multiple dining chains have already filed for Chapter 11 protection against liquidation. Some of the famous dining chains that suffered the same fate are Red Lobster, TGI Fridays, and Roti. On The Border, the Mexican chain joined the long list of bankrupt food chains this year. If you want to know more about the Mexican chain closing 77 locations over bankruptcy, this article is for you.
Mexican Chain Closes 77 Locations Over Bankruptcy
What Reason Did The Chain Give In Their Official Statement?
On the 5th of March, On The Border’s owner OTB Holding LLC made an official announcement about its voluntary filing for Chapter 11 bankruptcy. The dining chain did not really state any reason for its bankruptcy in its official statement. However, many food chains have reported a significant decrease in foot traffic due to a rise in inflation. Chris Rockwood, who is the President of On The Border, said in a statement that reconstructing is the best way forward for them. It will give them enough time to face the financial challenges, reconstruct their strategies, and focus on their growth.
What Did The Chain State In Its Official Court Filing?
The Mexican chain completed its official court filing with the US Bankruptcy Court located in the Northern District of Georgia. Jonathan M., who is the chief reconstructing officer of OTB, mentioned a rapid loss of liquidity in the official filing. The loss resulted in the institute holding vendor payments and rent payments to maintain the levels of cash. As a result, the vendors as well as the landlords cut their services off, withheld goods, repossessed leased premises, and also exercised set-off rights. The company, therefore, lost stores and faced additional operational challenges, along with a severe liquidity crisis.
How Many Restaurants Does The Mexican Chain Have?
According to the official information obtained from the company, On The Border currently has over 150 restaurants. These restaurants are located across the United States of America as well as South Korea. According to the official court filing in Georgia, it is reported that the majority of these locations are located in the United States. On The Border reportedly operates around 110 locations in the United States across 26 states.
Mexican Chain Locations Closing Across USA
According to the official court filings, the food chain has already closed around 77 of its locations that were underperforming. The food chain has also asked the court to allow it to reject the leases on the closed locations. Major states like Arizona, Arkansas, Colorado, Connecticut, Florida, Georgia, and Illinois will witness location closures. Other states in America like Indiana, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Jersey, and New York will also have closures. North Carolina, Ohio, Oklahoma, Pennsylvania, Texas, and Virginia will also have locations closed.
What’s Next For The Employees Of The Mexican Chain?
The Mexican food chain closing 77 locations over bankruptcy is the source of employment for over 2800 workers. Out of these, around 375 are working full-time while 216 of them are full-time salaried employees. On the other hand, the 2210 workers that remain are part-time hourly employees. The court documents filed in Georgia state that the food chain has filed for first-day relief pleadings. This means it has sought permission from the court to keep paying its workers their wages.
