Friendly's, the iconic East Coast restaurant chain known for its ice cream, has filed for bankruptcy again. It's the latest company in the restaurant industry to go that route during the coronavirus pandemic.
Friendly's Restaurants LLC filed for Chapter 11 protection in Delaware on Sunday, its filing said, with estimated liabilities of $50 million to $100 million and estimated assets of $1 million to $10 million.
In a news release, FIC Restaurants Inc., which operates Friendly's, said it intends to sell virtually all its assets to Amici Partners Group, which invests in and runs eateries.
"Nearly all of Friendly's 130 corporate-owned and franchised restaurant locations are expected to remain open subject to COVID-19 limitations," FIC said, "and the transaction is expected to preserve thousands of corporate-owned restaurant team member and franchisee jobs."
Friendly's, which is more than 80 years old, is seeking a bankruptcy court hearing next month to approve the sale to Amici and confirm the bankruptcy refinancing plan.
Friendly's "has sufficient cash on-hand to continue operations, meet its obligations to employees, franchisees and vendors, and ensure a seamless transition," according to the news release.
"Over the last two years, Friendly's has made important strides toward reinvigorating our beloved brand in the face of shifting demographics, increased competition and rising costs," George Michel, CEO of FIC Restaurants, said in the statement. "We believe the voluntary bankruptcy filing and planned sale to a new, deeply experienced restaurant group will enable Friendly's to rebound from the pandemic as a stronger business."
Major restaurant chains that have filed for either Chapter 11 or Chapter 7 bankruptcy in recent months include California Pizza Kitchen, Chuck E. Cheese, Ruby Tuesday, Sizzler and the U.S. operations of Le Pain Quotidien. Some chains will be reorganized through the bankruptcy courts and reopened under new financing and ownership, while others will close and be liquidated through the courts to repay creditors at pennies on the dollar.
Dave & Busters in September warned that pandemic pressures could also push the food and arcade chain into bankruptcy protection.
Friendly's declared Chapter 11 bankruptcy once before, in October 2011, according to Forbes.