Back Yard Burgers Files for Bankruptcy Protection in Delaware
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Back Yard Burgers Files for Bankruptcy Protection in Delaware

November 20, 2012


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Back Yard Burgers Inc., a popular chain of fast food restaurants, filed for bankruptcy last month, but it has already reached a plan with its creditors to restructure its debt, according to a report from Bloomberg Businessweek.

The Nashville-based company runs restaurants in 20 different states, but most of the stores are concentrated in the southeast part of the United States, according to sources.

Back Yard Burgers reportedly had as much as $50 million in debt when it filed, which pales in comparison to the $10 million worth of assets it currently holds.

The filing took place in Wilmington, Delaware, and sources note that it only includes the restaurants owned by the company itself, not the stores that are owned by franchisees.

In addition to Back Yard Burgers, three other companies connected with the burger chain also filed for bankruptcy. These other parties include BYB Properties, Nashville BYB and Little Rock Back Yard Burgers.

According to the company’s chief executive officer, James Boyd Jr., the company has already reached a settlement with its creditors. This is not uncommon, particularly with corporate bankruptcies.

Boyd told reporters recently the settlement represents the "culmination of an ongoing plan to improve the company’s operations by restructuring debt, addressing underperforming locations and identifying opportunities for growth."

The weakened state of the economy during the last few years had a profoundly negative impact on many restaurants, as customers stopped spending as much money on meals outside the home.

And Back Yard Burgers is no exception. In order to make ends meet, the company plans to close "underperforming locations in order to focus our resources and vision for the future on the rest of the business," according to Boyd.

Sources say the company plans to close up to 50 percent of its current locations. The closures represent a sad shift for a company that grew rapidly after it was founded in 1987 by a man serving homemade burgers in a Mississippi grocery store.

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