Ryan's Restaurant in Elkhart abruptly closes
Employees of one local restaurant showed up for work on Sunday, but were turned away by the news that they were out of a job.
Ryan’s Restaurant, at 2810 Emerson Drive, Elkhart, has a large blue sign out front stating simply that the location is closed and welcoming guest to try another location. The restaurant is owned by Buffets LLC — owners of the Old Country Buffet, HomeTown Buffet, Fire Mountain and Ryan’s brands — and has one location left open in the state, an Old Country Buffet in Indianapolis.
One employee at the Elkhart store said the closing was expected, but the lack of a warning took everybody by surprise.
“They had closed a bunch of Old Country Buffet locations in Illinois last month,” said J.C. Johnson, a longtime employee at the restaurant. “There were 40 to 60 full-time and part-time employees at this location. I had an early retirement to fall back on, but some people had nothing.”
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Ryan’s in Elkhart fell victim to a rash of closings nationwide by Buffets LLC due to bankruptcy proceedings, according to a press release. The company filed for bankruptcy on Monday.
“Buffets LLC is set to file Chapter 11 bankruptcy so that it can restructure its debts and liabilities, strengthen its operations by closing certain weaker restaurants and recapitalize its business. Customers will continue to enjoy the same quality food and service as prior to the proceedings, and vendors will be largely unaffected,” the release said.
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The vice president of the company, Peter Donbavand, said that the bankruptcy was due to the discovery of additional liabilities after a merger in 2015.
“Buffets, LLC, was acquired by merger in August of 2015. The Chapter 11 filing is prompted by the discovery of liabilities, or alleged liabilities, that we believe were not disclosed in our negotiations,” says Donbavand.
The company has listed assets of less than $50 million and debts in the range of $50 million to $100 million. Sales were down 22 percent so far this year, the company had closed 74 eateries in the weeks prior to the bankruptcy and another 92 stores immediately before the bankruptcy filing, according to court papers.
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The company has also blamed the bankruptcy on a $11.37 million legal judgment against the company tied to a Wyoming lawsuit.
In court papers, the company states that it feels it can return to profitability once it sheds its unprofitable restaurants and deals with the judgment against it.