(Bloomberg) – Hooters of America works with creditors on a plan to restructure the business through the Bankruptcy Court in the coming months, according to people with information about the arrangements.
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The occasional dining chain works with the law firm Ropes & Gray to prepare filing, the people said, who added that the plans are final and were asked not to be identified in discussing private preparations. The court process would likely start within the next two months, the people said.
The company, which was known for its skimpy server outfits and a double-stytendre owl mascot, was working to address its debt load with its lawyers as well as turning councilors by the Buttle Accordion Partners, Bloomberg boutique company , Bloomberg previously. Some of Demtholders Hooters have tapped Houlihan Lokey Inc. For advice.
Representatives for Hooters, Accordion Partners and Ropes & Gray did not respond to requests for comment. A representative for Houlihan refused to comment.
Hooters have faced liquidity problems as foot traffic deteriorates and closed several locations. The chain sold approximately $ 300 million in bonds supported by assets in 2021, according to data compiled by Bloomberg.
The bonds supported by assets are packaged as whole business guarantees-a company promises most of its assets, including franchise fees, as a parallel-products that are popular with restaurant chains, clubs Fitness and other businesses with franchise shops.
Casual dining chains have come under pressure as inflation, supply chain disturbance and higher interest expenses raise menu prices, making consumers a less interest in eating out. More than a dozen large restaurants or franchise holders tried to bankruptcy defense last year, according to bankruptcy.
Restaurant prices increased by about 44% between 2015 and March 2024, according to the Black Box Intelligence Data Company, compared to a 26% increase for grocery items over the same period.
-With help from Dorothy Ma and Jonathan Randles.
(Updates to add a joint -context on the occasional dining industry in the eighth and ninth paragraph.)
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