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Law360 (September 21, 2020, 8:54 PM EDT ) Family-themed steakhouse chain Sizzler filed for Chapter 11 protection late Monday in California, saying it needed to renegotiate the terms of its leases as it deals with the economic fallout of the COVID-19 outbreak.
In initial filings made in San Jose bankruptcy court, Sizzler USA said it needed to change the terms of the leases governing its 14 corporate-owned restaurants to allow it to continue operating the business after restrictions enacted in light of the coronavirus pandemic impacted its revenue this year.
"Many restaurant brands across the country have suffered because of COVID-19 and Sizzler USA is no exception," President and Chief Services Officer Chris Perkins said in a statement. "Our current financial state is a direct consequence of the pandemic's economic impact due to long-term indoor dining closures and landlords' refusal to provide necessary rent abatements."
"But today's decisive action to build a stronger future for Sizzler will allow us not only to do everything we can to support our employees and franchisees during this time, but also to be better-positioned for growth as we emerge to become a more vibrant company," Perkins continued.
In total, the chain has 107 locations in 10 states and Puerto Rico and has been in operation for 62 years. Sizzler said it intends to continue operating all of its restaurants during its Chapter 11 case, which it anticipates wrapping up in less than six months as it seeks rent concessions from its landlords.
Sizzler and its subsidiaries are taking advantage of Subchapter V of the bankruptcy code for small business debtors with less than $7.5 million of debt as their petitions list both assets and liabilities below $10 million.
The Mission Viejo-based company previously filed for bankruptcy almost 25 years ago, closing more than 100 restaurants as consumer tastes shifted away from the family casual steakhouse's offerings.
Sizzler is represented by Ori Katz, Jeannie Kim and Gianna Segretti of Sheppard Mullin Richter & Hampton LLP.
The case is In re: Sizzler USA Real Property Inc., case number 20-bk-30746, in the U.S. Bankruptcy Court for the Northern District of California.
--Editing by Emily Kokoll.
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