Meritage Hospitality Group filed for voluntary Chapter 11 protection in the U.S., the company said in a Sept. 17 press release, confirming the “meritage hospitality group chapter 11” filing in the U.S. Bankruptcy Court for the Western District of Michigan.
The GlobeNewswire release posted on Markets Insider said Meritage filed petitions for relief on Sept. 17 to strengthen its balance sheet and pursue a court-supervised restructuring; the company said it operates 314 Wendy’s restaurants and expects to keep restaurants open during the process.
Local reporting by WOODTV in Grand Rapids and a Miami Herald business story corroborated the filing and added that the company listed its assets and liabilities in the $10 million to $50 million range in the Chapter 11 papers filed Thursday.
Meritage said in the filing that it is seeking debtor-in-possession financing and intends to continue paying wages and benefits to its roughly 9,000 employees while operating restaurants in the ordinary course, subject to court approval of customary “first-day” motions.
The filing follows more than a year of financial stress for the franchisee, including earlier notices of default from its lender and franchisor and prior cost-cutting that closed dozens of underperforming locations, according to the Miami Herald and WOODTV reporting.
Analysts and industry coverage note that franchisee bankruptcies and restructurings have been more common across the sector this year as operators cope with rising costs and brand-wide traffic pressures; similar filings earlier this year included other restaurant operators seeking protection to reorganize.
Readers looking for related recent filings can see coverage of other restaurant and franchise restructurings across the industry, including reports on LIV Golf’s bankruptcy and a Denny’s franchisee closing locations in the region.
Meritage’s press release named McDonald Hopkins LLC as legal counsel and Fort Dearborn Partners as restructuring advisor and said court filings and claims information will be posted by the company’s noticing agent, Kroll.
Sources
- GlobeNewswire / Markets Insider — company press release and Chapter 11 filing details, including number of restaurants and intent to obtain DIP financing.
- Miami Herald — reporting on the Sept. 17 filing, assets/liabilities range and background on prior defaults and location closures.
- WOODTV — local coverage confirming the filing, the reported 314 Wendy’s locations and expected continuation of operations and payroll.
