Unable to engineer a restructuring of its massive debt, Victoria Station, the restaurant chain with a railroad theme, said Tuesday that it has filed to reorganize under Chapter 11 of the U.S. Bankruptcy Code.
The 2-decade-old company, based just north of San Francisco in Larkspur, took the unusual step of also filing a plan of reorganization. In most cases, a company takes several months after filing a Chapter 11 petition before it submits a reorganization plan. In a statement, the company said that "based on recent discussions with its senior lenders regarding the reorganization plan, it expects to receive their cooperation."
The chain, which has closed about 40 restaurants in the last year and now operates 50, announced in February that it was in violation of its bank loan agreements because of deepening losses.
For the third quarter ended Jan. 5, the company reported a loss of $19.1 million, compared to a $1.3-million loss in the year-earlier period. The results included a one-time charge of $17.6 million to cover the closing of 29 restaurants. For the nine months, Victoria Station suffered a loss of $24.3 million, compared to a loss of $3.7 million a year earlier.
As of Jan. 5, the company said it had assets of $6.5 million and liabilities of $38 million. In its statement, the company said it hoped that the unusual early filing of a plan would result in a "faster, more efficient proceeding."
Spokeswoman Anne Merrifield said Tuesday that company officials were in court and unavailable for comment. However, she noted that the company, which takes a meat-and-potatoes approach to dining, has suffered from the "bad recession in the restaurant industry."