Rubio’s Coastal Grill, which opened in San Diego on October 1, 1894, announced on Wednesday that it is filing for bankruptcy protection with the intention of selling the company. The restaurant was founded in San Diego and was formerly home to shut to 200 franchises.
The bank’s public relations company announced in a press release that the existing 86 Rubio areas would continue to be operational while the Chapter 11 bankruptcy process is being pursued.
This latest registration marks the , next bankruptcy , in a timeframe of less than four years and comes only days after Rubio’s immediately closed 48 of its franchises, 13 of them across San Diego County.
” Rubio’s Coastal Grill is one of the famous fast- everyday stores with a strong and loyal customer following in its communities”, said Nicholas Rubin, general restructuring officer of Rubio’s Coastal Grill in a statement. Despite the company’s best efforts to correct its size, the company’s continued difficult economic times have had a negative impact on its ability to meet the demands of its debt. The company believes that a court-supervised sale process will help Rubio’s grow and prosper the brand’s long-term success.
Rubin reported that its current lender has agreed to provide debtor financing and has sufficient liquidity to keep operating the restaurants while the sale is being finalized.
The Chapter 11 petition, filed on Wednesday in Delaware, states that Rubio’s Restaurants has assets of between$ 10 million and$ 15 million, while liabilities are estimated to be between$ 100 million and$ 500 million. According to the company, the number of creditors could reach as many as 25, 000.
Its lender, TREW Capital Management, has an unsecured claim worth nearly$ 28 million, making up the top 30 largest creditors without any secured claims. Also on the list are the California Department of Tax and Fee Administration, San Diego Gas &, Electric, Southern California Edison and the San Diego County Treasurer- Tax Collector, with more than$ 74, 000 owed. Rent is due in several unsecured claims, including the$ 55 665 owed to the Aztec Shops at San Diego State University, where there is a campus Rubio’s.
As it did a few days ago, Rubio’s blamed its declining performance on what it claimed was the difficulty of running a business in California, where a recent wage increase to$ 20 an hour was in effect for all fast food workers. While others are waiting and seeing, some fast food restaurants have already raised prices in response to the wage increase.
Rubio’s stated that it intends to enter a” shelf purchase agreement” to sell the company to a group that would be created and run by its current lender. It anticipates closing the sale in 75 days. It will be asking for court approval to continue operations, which it claimed would allow employees to continue receiving their pay and benefits.
The county’s restaurants that have been closed include those in Chula Vista and San Marcos. However, there are still 29 Rubio’s locations in the county, including the first location on Mission Bay Drive in Pacific Beach, which first opened in 1983 as an homage to the first Baja California-style fish taco.
The original fish taco was the original home of the Mexican fast food chain, and Ralph Rubio, the co-founder of it, will remain with the business, according to a news release. He will “provide his usual inspiration and energy going forward,” the release said.
Rubio has not responded to a request for an interview from the Union-Tribune and has declined to comment on the chain’s financial woes, which have been growing for years.
Even with 86 remaining Rubio’s outlets in California, Arizona and Nevada, the chain is a fraction of what it once was. A little less than four years ago, the company had as many as 170 locations in the U. S. Of the still operating restaurants, the bulk of them — 61 — are in California.
Analysts for San Diego restaurants John Gordon predicted the start of bankruptcy soon.
” Rubio’s had its day but once it left the publicly traded markets and ( current owner ) Mill Road Capital took it over, it went into maintenance mode”, Gordon told the Union- Tribune. ” Ralph Rubio, the founder, continued to consult with them but nothing much happened”.
The current owner of Rubio’s, private- equity firm Mill Road Capital,  , acquired the company in 2010 for$ 91 million, a sale that transformed what had been a publicly traded company into a privately owned business. Five years later, the restaurant changed its name to Rubio’s Coastal Grill and changed its name.
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