Is this story the early warning debt shot>>Long John Silver's Restaurants files for bankruptcy
1.07 p.m. ET (1708 GMT) June 2, 1998
LEXINGTON, Ky. The Long John Silver's seafood restaurant chain
filed for protection from its creditors under Chapter 11 of the federal bankruptcy
laws.
Long John Silver's has about 1,300 restaurants in 37 states and two foreign
countries.
The company listed liabilities of $457.3 million and assets of $329.1 million in the
filing, which was made after business hours Monday in the U.S. Bankruptcy
Court in Delaware. While based in Lexington, the company is incorporated in
Delaware.
It traced its financial difficulties to the 1989 buyout by senior management that
took the company private. Spokesman Bruce Hinton said the company has been
saddled with large debt since that time. Long John Silver's was formerly a division
of Jerrico. Lot's of debt!!!
The Chapter 11 bankruptcy filing allows a company to continue operating, while
protecting itself from claims by creditors as it develops a financial reorganization
plan. The plan is subject to approval by creditors and the court.
John Cranor, chairman and chief executive of Long John Silver's, said the
company has closed offices, reduced staff and made numerous marketing
changes. But even with three consecutive quarters of sales and profit growth, the
company has been unable to get new working capital.
The company sparked protests from the Fraternal Order of Police last year with
an advertising campaign that portrayed a bumbling police officer swiping a
motorist's food . And a West Virginia company sued, saying it had a trademark
on the slogan used in the ads, "grab and go.'' Then, in May, a lawsuit accused the
company of breach of contract and fraud for allegedly failing to pay for more than
$3 million worth of "Lost in Space'' toys.
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