Bad news for the restaurant industry! Recently, a major brand that operates several restaurant chains announced it has filed for Chapter 11 bankruptcy protection in the United States. The company in question is PB Restaurants LLC, which manages the operations of Planet Hollywood, Planet Express (LAX) LLC, and Times Square Buffet LLC. This development has raised concerns among customers about the future of these restaurants. Here’s everything we know so far.
Why did PB Restaurants LLC file for bankruptcy?
According to recent reports, PB Restaurants LLC formally filed for bankruptcy in early April. In the documents submitted to the court, the company disclosed that its assets are valued between $100,000 and $500,000, while its liabilities range from $1 million to $10 million. It’s worth noting that a few weeks prior, Planet Express (LAX) had closed one of its Planet Hollywood locations, which was situated in the Tom Bradley Terminal at Los Angeles International Airport.
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Will the restaurants operated by PB Restaurants LLC close?
So far, the company has not specified the future of its restaurants, so we’ll have to wait for an official announcement.
About PB Restaurants LLC
PB Restaurants LLC specializes in restaurant management, operating primarily under the well-known Planet Hollywood brand, as well as locations under the name Protein Bar and Kitchen. In May 2024, the company filed for Chapter 11 bankruptcy for the first time. Despite this situation, PB Restaurants LLC continues to operate around 478 locations across 44 U.S. states, though it is currently facing significant operational and financial challenges.
What is Chapter 11 of the U.S. Bankruptcy Code?
Filing for bankruptcy protection under Chapter 11 means that a company is on the brink of ceasing operations, but believes it can recover its success if given the opportunity to reorganize its assets, debts, and business operations.
By filing under Chapter 11, the company seeks protection from creditors while restructuring its business and debt. This type of protection is available to corporations, individual entrepreneurs, and partnerships. Under Chapter 11, the company’s management continues to oversee daily operations. However, major business decisions must be approved by the bankruptcy court.
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Who can seek protection under Chapter 11?
U.S. law allows any company or individual with a domicile, business establishment, or assets in the country to request judicial supervision to restructure their finances and operations under the provisions of Chapter 11.
There is no minimum or maximum value for the assets of a foreign company in the U.S. to be eligible for Chapter 11 protection under U.S. Bankruptcy Law. In certain cases, deposits held by the legal firm managing the process in the U.S. may be considered assets, making the debtor eligible to seek Chapter 11 protection.
What benefits does Chapter 11 offer?
This section serves as an alternative to penalties, meaning that the company or individuals seeking it can avoid immediate dissolution, liquidation, and drastic cuts. During this process, the law allows the entity to continue operating and restructure without pressure from creditors. At the same time, it enables them to negotiate and propose a repayment plan for their debts.
Moreover, reorganization procedures under Chapter 11 offer the advantage that the company’s management retains control over the business, making the reorganization plans generally more effective, as the executives who stay in charge are the ones best familiar with the company, partnership, or individual involved.
