The owner of the Hooters Casino Hotel announced today that it will seek a financial restructuring of its current debt through a petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code which was filed today with the United States Bankruptcy Court for the District of Nevada.
The Company had been in extensive negotiations with its primary bondholder, which purchased approximately 98% of the company’s debt at a substantial discount. The Company no longer believes a pre-negotiated restructuring is possible, and has therefore elected to commence the Chapter 11 process immediately. All hotel and casino operations will continue to operate as usual during the Chapter 11 process, including with respect to employees, customers and vendors.
The Company stated: “We regret that we have been unable to reach an acceptable settlement with our new bondholder. We are confident that an orderly and transparent Chapter 11 process will provide the Company with the opportunity to properly restructure its balance sheet and emerge as a stronger business, while also continuing to operate with no disruption to our customers, employees and vendors. Absent the significant debt payments we’re currently obligated to pay, Hooters Casino Hotel is a profitable, successful business and we look forward to completing this process to return our entire focus to running our business and serving our guests.”
The Company also stated: “This action in no way affects the operation of the more than 430 Hooters Restaurants in 44 states and 27 countries which are owned or franchised by Atlanta based Hooters of America, LLC.”
The filing is planned in order to protect the Hotel Casino’s assets and ongoing hotel services to its guests. Chapter 11 of the U.S. Bankruptcy Code allows a company to continue operating its business and managing its assets in the ordinary course of business. The U.S. Congress enacted Chapter 11 to encourage and enable a debtor business to continue to operate as a going concern, to preserve jobs and to maximize the recovery for all stakeholders.
