Uno Restaurant files for Chapter 11
January 20, 2010
BOSTON — Uno Restaurant Holdings Corp., owner of 179 company-owned and franchised full-service Uno Chicago Grill restaurants, filed for Chapter 11 bankruptcy protection in New York on Jan. 20. The company cited slower consumer spending as a significant factor behind a $22.2 million loss in fiscal 2009, and ultimately, the decision to file for bankruptcy protection.
The company did note that it has taken steps to restructure debt and strengthen its balance sheet, including reaching an agreement the past August with a majority noteholder group on a debt-for-equity exchange that would cut its liabilities by about $142 million. The company also said it has negotiated terms with Wells Fargo Capital Finance, Inc. and the majority noteholder group for $52 million in debtor-in-possession financing to continue operations while in bankruptcy.
“The steps we’ve taken represent the culmination of many months of work on the part of the company, its current owners and the noteholder group made up of members comprising a majority of the company’s outstanding notes,” said Frank Guidara, president and chief executive officer of Uno. “The Uno brand is strong; it’s the balance sheet that needs fixing. Today’s announcement marks the beginning of a new era for Uno wherein the company will no longer be saddled with a burdensome debt load.
“Accordingly, we will now be able to leverage our operational strength, which combined with the substantially improved cash flow expected to result from our restructuring, will put us in a position to make long-term investments in the future of Uno’s core businesses, Uno Chicago Grill restaurants, Uno Due Go, Uno Express and our Uno Foods Consumer Products Business.”
Uno closed 17 restaurants before filing for bankruptcy and said it may consider closing more restaurants if it is unable to negotiate acceptable lease terms.
Uno, founded in 1943 in Chicago as Pizzeria Uno, franchises and operates 179 restaurants in 28 U.S. states, Puerto Rico, South Korea, the United Arab Emirates, Honduras, Kuwait and Saudi Arabia.