Friendly’s Files for Chapter 11
The Friendly’s fast-food and ice cream chain filed for bankruptcy protection on Wednesday and said that it would close 63 restaurants.
The company said it hoped to restructure quickly under section 363 of the Federal Bankruptcy Code. An affiliate of its current owners, Sun Capital Partners, will act as a “stalking horse” bidder, to set the floor for bids for Friendly’s. The company has secured $70 million in debtor in possession financing.
Sun Capital, a private equity firm based in Boca Raton, Fla., acquired Friendly’s for $337.2 million in 2007. Sun Capital, known for its work in turnaround situations, has experience with retail and consumer companies in bankruptcies.
The Chapter 11 filing, in United States Bankruptcy Court in Delaware, estimates liabilities of $100 million to $500 million. The federal Pension Benefit Guaranty Corporation and Bank of New York Mellon, which holds $7.8 million in senior subordinate notes, are listed as its top creditors.
The company said the bankruptcy filing “was driven largely by the challenges of the current economic downturn.” It also pointed to increased costs for cream, among other expenses.
Friendly’s was founded in 1935 in Springfield, Mass. The company said 424 restaurants would be open for business as usual.
Duff & Phelps is serving as financial adviser.
source: dealbook.nytimes.com
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