Description: The owner of the Perkins and Marie Callender’s restaurant chains filed for bankruptcy on Monday with plans to close 65 of its 600 locations and cut 2,500 jobs, according to court documents. Perkins & Marie Callender Inc became the latest food company to fall victim to a sluggish recovery and soaring food prices. Last week, chicken producer Allen Family Foods tumbled into bankruptcy.
Questions for discussion:
- Summarized the reasons for these restaurant bankruptcies.
- How have competitors gained advantage by restructuring their debts earlier than Perkins?
- As a financial manager dealing with these restructured firms, what precautions could you take to mitigated risks?