Friendly's, the iconic East Coast restaurant chain known for its ice cream, has filed for bankruptcy again. It's the latest company in the restaurant industry to go that route during the coronavirus pandemic.
Friendly's Restaurants LLC filed for Chapter 11 protection in Delaware on Sunday, its filing said, with estimated liabilities of $50 million to $100 million and estimated assets of $1 million to $10 million.
In a news release, FIC Restaurants Inc., which operates Friendly's, said it intends to sell virtually all its assets to Amici Partners Group, which invests in and runs eateries.
FIC said, "Nearly all of Friendly's 130 corporate-owned and franchised restaurant locations are expected to remain open subject to COVID-19 limitations, and the transaction is expected to preserve thousands of corporate-owned restaurant team member and franchisee jobs."
Friendly's, which is more than 80 years old, is seeking a bankruptcy court hearing next month to OK the sale to Amici and confirm the bankruptcy plan.
Friendly's "has sufficient cash on-hand to continue operations, meet its obligations to employees, franchisees and vendors, and ensure a seamless transition," according to the news release.
"Over the last two years, Friendly's has made important strides toward reinvigorating our beloved brand in the face of shifting demographics, increased competition, and rising costs," George Michel, CEO of FIC Restaurants, is quoted as saying.
" … Unfortunately, like many restaurant businesses, our progress was suddenly interrupted by the catastrophic impact of COVID-19, which caused a decline in revenue as dine-in operations ceased for months and re-opened with limited capacity.
"We believe the voluntary bankruptcy filing and planned sale to a new, deeply experienced restaurant group will enable Friendly's to rebound from the pandemic as a stronger business."
Friendly's declared Chapter 11 bankruptcy once before, in Otober 2011, according to Forbes.