Customers are seen at a Back Yard Burgers restaurant on Elm Hill Pike in Nashville. - Jae S. Lee / File / The Tennessean
By Walker Moskop, The Tennessean
Nashville-based Back Yard Burgers filed for Chapter 11 bankruptcy protection in Delaware on Wednesday.
According to court records, the burger chain has up to $10 million in assets and as much as $50 million in liabilities.
In
a release, Back Yard Burgers officials said the Chapter 11 filing was
the final phase of a plan to restructure the company's debt, reduce its
operating expenses and position it for future growth.
The once publicly traded company went private in 2007 when a group of investors made the $38 million deal.
Former
Sonic CEO Stephen Lynn of Nashville, Atlanta-based Cherokee Advisers
LLC and Nashville-based private equity firm Pharos Capital Group
acquired the chain, which was based in Memphis at the time.
According
to court records, the company's largest creditor is Gordon Food Service
Inc., which lists a claim of $394,488.29. The second largest creditor
is the Tennessee Department of Revenue, which has a claim of
$150,562.84.
The company recently closed several stores, including six in the Memphis area and four in Nashville.
Company
spokesman Tom Becker said that Nashville and Memphis were important
markets, and that the company planned to eventually open more stores in
the two cities, despite the recent closings.
"The idea is to find a way to actually grow this company," he said.
Back
Yard Burgers has 25 company-owned locations and roughly 64
franchise-owned stores, Becker said. There are six remaining stores in
Nashville.
Becker declined to disclose the company's revenues.
Lynn said in a phone interview that he was a passive investor in the company and was no longer involved in its operations.