Buffets Holdings, Inc. Subsidiaries Seek Court Authorization to Reject Master Lease for 129 Restaurants
EAGAN, Minn.--(Business Wire)--
Buffets Holdings, Inc., ("the Company") announced today that
several of its subsidiaries have filed a motion with the U.S.
Bankruptcy Court for the District of Delaware seeking authorization to
reject a master land and building lease for 129 of the Company's
restaurants. The motion also seeks court authorization to close 127 of
these locations by the end of August 2008. (Two restaurants covered by
the master lease have previously been closed.)
The Company has already successfully concluded lease negotiations
with landlords for its other restaurant locations. The Company has
sought modifications to the onerous master lease from various
affiliates of Fortress Investment Group LLC, the holders of the master
lease, which would permit some or all of the 127 restaurants to remain
open. While those negotiations have not been productive, the Company
continues to explore a consensual resolution. A court hearing for the
lease rejection motion has been scheduled for July 30, 2008.
In its motion, the Company describes a number of issues with the
master lease, including above-market rents, mandatory annual rent
increases of 2% or more, and other onerous provisions that provide
little recourse when units perform poorly.
All but seven of the restaurants covered by the master lease in
question operate under the Ryan's or Fire Mountain brand names. The
127 restaurants collectively have approximately 7,500 full and
part-time employees.
Buffets Holdings, Inc. and all of its subsidiaries filed voluntary
petitions for reorganization under Chapter 11 of the U.S. Bankruptcy
Code on January 22, 2008. More information about Buffets Holdings'
reorganization is available in the Company Information section of the
Company's Web site at www.Buffet.com. Claims information and court
filings are available at http://chapter11.epiqsystems.com/buf.
About Buffets Holdings
Buffets Holdings is the parent company of Buffets, Inc., the
nation's largest steak-buffet restaurant company, which currently
operates 569 restaurants in 39 states, comprised of 559 steak-buffet
restaurants and 10 Tahoe Joe's Famous Steakhouse(R) restaurants, and
franchises 17 steak-buffet restaurants in six states. The restaurants
are principally operated under the Old Country Buffet(R), HomeTown
Buffet(R), Ryan's(R) and Fire Mountain(R) brands. Buffets, Inc.
employs approximately 33,000 team members and serves approximately 180
million customers annually. For more information about the Company,
please visit our websites at www.Buffet.com and www.Ryansrg.com.
Safe Harbor Statement
The statements contained in this press release that are not
historical facts are forward-looking statements, including references
to the Company's plans in the context of a bankruptcy reorganization.
These and other forward-looking statements are subject to risks and
uncertainties that could cause actual results to differ materially
from those set forth in, or implied by, the forward looking
statements. Factors that may cause actual results to differ from the
forward-looking statements in general are described in the "Risk
Factors / Forward-Looking Statements" section in Buffets Holdings'
Form 10-K/A filed with the Securities and Exchange Commission on March
31, 2008 and in Buffets Holdings' Quarterly report on Form 10-Q filed
with the Securities and Exchange Commission on May 30, 2008. The
statements in this release reflect Buffets Holdings' current beliefs
based upon available information. Developments subsequent to this
release are likely to cause these statements to become outdated, and
no obligation is undertaken to update the information.
Media:
Kekst and Company
Michael Freitag
Diana Postemsky
Victoria Weld
212-521-4800
Copyright Business Wire 2008
