Owner of El Torito seeks bankruptcy protection
The owner of Mexican restaurant chains Chevys Fresh Mex, El Torito and Acapulco filed for bankruptcy protection, pressured by years of slipping sales and the country’s economic malaise, executives said.
RM Restaurant Holding Corp. in Cypress filed a Chapter 11 petition Tuesday in the U.S. Bankruptcy Court in Delaware, listing $272.2 million in assets and $250 million in debts.
Its revenue had fallen to $478 million last year from $553 million in 2008, the first full year of the Great Recession, as fewer customers dined at its 178 restaurants, according to the filing.
The restaurants are in states battered by “significant increases in unemployment” and the mortgage crisis, Chief Financial Officer Richard P. Dutkiewicz said in the filing.
About 84% of the company’s locations are in California, where the purchasing and distribution facilities also are based.
Dutkiewicz said the recession has left much of the public “less prone to spending their disposable income” and that the company does not expect a “meaningful improvement in the economy” this year.
A performance index created by the National Restaurant Assn. trade group last week fell to its lowest level in 13 months amid falling customer traffic, the aftermath of Hurricane Irene and continued uncertainty among eatery operators.
Real Mex Foods Inc., RM’s purchasing and distribution subsidiary, was hit hard by rising commodity prices and the loss of key contracts, the filing said.
Real Mex provides Mexican food products to chains such as El Pollo Loco, Del Taco and Baja Fresh, as well as to retailers including Trader Joe’s, Costco and Vons.
RM has about 11,000 employees.
