Romano’s Macaroni Grill filed for Chapter 11 bankruptcy protection on Wednesday amid store closures and a restructuring of the casual-dining chain's operations.
The Denver-based chain recently closed 37 locations, prompting lawsuits by some of the company’s landlords.
According to a filing with the U.S. Bankruptcy Court for the District of Delaware, many of the company’s landlords are “seeking to recover damages far in excess of anything they would be entitled to under bankruptcy.”
Macaroni Grill has 93 company-owned locations and franchises another 23 units.
The company said in its filing that it has $23 million in secured debt and had negative earnings before interest, taxes, depreciation and amortization (EBITDA) of $12 million on revenues of $230 million.
Arizona-based RedRock Partners LLC owns Macaroni Grill, which it acquired from Ignite Restaurant Group Inc. in 2015 for $8 million.
In its filing, Macaroni Grill cited a decrease in sales and an increase in labor and commodity costs, which hurt profits.
Nishant Machado, the company’s acting CEO, blamed the chain’s problems on “an overall downturn for the casual dining industry,” including a preference of customers toward “cheaper, faster alternatives.”
He also cited “a trend among younger customers to spend their disposable income at non-chain ‘experience-driven’ restaurants.”
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