Bankruptcy Leads to Perkins Restaurant Closures

For the second time in eight years, Perkins & Marie Callender’s Holding LLC, the company which operates Perkins restaurants, filed for bankruptcy. The last time the company filed was back in 2011. Back then the company filed as a holding of the investment group led by Wayzata Investment Partners, which still controls close to 73 percent of the company. Following this bankruptcy filing, there have been Perkins restaurant closures across Wisconsin and other states. Currently, two Perkins locations in Madison remain open as well as those located in Wisconsin Dells and Onalaska.

Perkins Restaurant Closures Amidst Company Filing for Bankruptcy

A Memphis, Tennessee based company, Perkins & Marie Callender’s LLC, filed for Chapter 11 bankruptcy. The filings reveal that the company owes around $100 million to lenders and liabilities totaling $100 million to $500 million. The company’s assets are only valued at $50 to $100 million. The bankruptcy filing indicated that poor financial performance was the result in a decline in sales within both the family dining and casual dining industries. The company has secured $7.75 million in bankruptcy loans, according to court records. The loans are what is referred to as debtor-in-possession financing and are secured in order to continue operating.

The company is in the midst of restructuring and has closed over 19 Marie Callender’s and 10 Perkins. Over 1,000 employees have been affected by this. The company hopes to minimize any further disruptions and loss of employment by making a smooth process of selling off parts of the company and helping ease the transition. Perkins, founded back in 1958, has 342 restaurants in the U.S. and Canada.

Perkins & Marie Callender’s LLC filed for bankruptcy in the U.S. Bankruptcy Court located in Wilmington, DE. While any final sale or other finances would need to be approved by the bankruptcy judge, the company is planning to sell the Perkins portion of the business as well as part of its Foxtail bakery business to Perkins Group LLC. This, referred to as a “stalking horse” bid, lays the foundation for the court-supervised auction of the company’s assets that is likely to take place in September. There are also negotiations underway to sell off parts of Marie Callender, the smaller of the two restaurant brands within the company. There are currently 51 Marie Callender stores operating in the U.S.

Experienced Bankruptcy Attorneys

Bankruptcy involves complex negotiations and company restructuring. There is a lot at stake during all of this. People’s jobs, their livelihoods, and their financial futures hang in the balance along with the future of the company. At Hanson & Payne, our experienced bankruptcy attorneys know how to handle these delicate and complicated matters to protect the best interests of our clients. We are here to discuss your options and to represent you throughout the bankruptcy proceedings. Contact us today.

Will Bankruptcy Allow PG&E to Shirk Responsibility for the Camp Fire?

Last fall, the “Camp Fire” burned over 150,000 acres of land and killed 85 people in Northern California. Although investigators have determined how the fire was started, it is unclear whether the responsible party will be brought to justice. The reason why? They have declared bankruptcy. 

The Fire

Like most other Wisconsinites, who are not accustomed to seeing such horrors in our part of the country, the attorneys in our office were shocked by the news reports and viral video clips from the Camp Fire. Walls of flame devoured everything in their path — including many people who were trapped in their cars. It is still sickening to think of. 

Investigators determined the fire was caused by electrical transmission lines owned and operated by Pacific Gas and Electricity (PG&E). On the hook for billions of dollars in damage, the utility company filed for Chapter 11 bankruptcy protection

The Bankruptcy 

When PG&E filed for bankruptcy, it became the largest utility to ever do so. The company is reportedly over $50 billion in debt, not counting the amount it will owe to victims of the Camp Fire under California’s strict fire liability laws. 

When a company is facing this sort of massive, unknown liability, bankruptcy is often the best option — for everyone involved. Why? Our bankruptcy laws require that every creditor be paid if at all possible, while at the same time allowing the business to move forward. 

Perhaps fire victims will not be paid back for 100% of their losses, but allowing PG&E to restructure and continue operating rather than shutting down will ensure they get something.

It is likely that the bankruptcy court will estimate the fire damages, direct PG&E to come up with some percentage of that amount, then require victims to make claims on that fund while barring future lawsuits. 

Not Shirking Their Duty

Companies who file for bankruptcy in the face of lawsuits are not shirking their responsibility to the public. They are taking advantage of the law to create some certainty in an uncertain situation. Filing for bankruptcy hits pause on all other litigation involving the company and pulls some lawsuits into the bankruptcy process. 

Knowing a defendant is bankrupt, or will be if a major verdict comes down against them, incentivizes the potential plaintiffs to negotiate a solution that will allow all plaintiffs — instead of just the first to file — to get some sort of compensation. There’s probably not enough money to compensate everyone fully, especially if the company has lots of other debt, but the bankruptcy process ensures victims are treated fairly and equally. 

It will be interesting to see how the PG&E case moves forward since the amounts at stake are so large. It may also set the precedent for future cases across the country where a man-made natural disaster wreaks havoc. We will be keeping a close eye on it. 

If your business is facing legal debts that may drive it into bankruptcy, Hanson & Payne LLC is ready to advise you and guide you through the process. Contact us today to schedule an initial consultation.

Choosing State or Federal Bankruptcy Exemptions

Wisconsin Bankruptcy

When you file for bankruptcy, you can protect certain property from sale to satisfy your creditors. You do this by classifying the property as “exempt,” meaning it is exempt from the reach of creditors. If you are filing for bankruptcy in Wisconsin, you have the ability to choose whether you want to claim state or federal bankruptcy exemptions. Wisconsin is one of the few states that allows for this and it can be a huge advantage should you weigh out your options and choose wisely.

Choosing State or Federal Bankruptcy Exemptions

With Chapter 13 bankruptcy, you get to retain both exempt and nonexempt property. You will be responsible for paying back property value to your creditors through an established payment plan executed over several years. With Chapter 7 bankruptcy, however, the bankruptcy trustee has the authority to sell the property to satisfy creditors. Property that is eligible to be sold to benefit creditors is called “nonexempt.” “Exempt” property will be protected from sale.

Additionally, if you file Chapter 13 bankruptcy, exemptions can be used in order to reduce the amount of money that you will be required to pay to satisfy your unsecured creditors. If you are concerned about losing specific property in bankruptcy proceedings, there are several strategies you may employ to protect it. One such strategy is through the use of exemptions. In Wisconsin, you not only can choose some property as exempt, but you can choose between the Wisconsin exemption scheme and the federal exemption scheme. The schemes differ in several key respects. Choosing the one that best protects your assets is important. You must choose one scheme or the other. You cannot pick and choose from both the Wisconsin and federal exemption schemes.

Some of the more notable exemptions for those choosing the Wisconsin state scheme include:

  • $75,000 homestead exemption
  • $4,000 motor vehicle exemption
  • $12,000 consumer goods exemption
  • $5,000 savings and checking accounts exemption

These amounts double if you are married and are jointly filing for bankruptcy with your spouse. This is also true for the amounts of notable exemptions in the federal state, which include:

  • $22,975 homestead exemption
  • $3,675 motor vehicle exemption
  • $12,250 household goods exemption
  • $1,225 exemption applicable to anything you own (referred to as the “wild card” exemption

Also, under both schemes, most retirement accounts are fully protected.

Wisconsin Bankruptcy Attorneys Protecting Your Best Interests

You can get through bankruptcy without losing everything. The fact that Wisconsin allows you to choose between federal and state exemptions is a big advantage and it is a significant decision to make, one of many that will present itself in the bankruptcy process. Hanson & Payne, LLC will help you evaluate your options and make sure you are choosing the scheme that maximizes property protection benefits in your individual case. Let our knowledgeable bankruptcy attorneys protect your best interests as you move forward through the bankruptcy process. Contact us today.