Popular fast-food chain shares Chapter 11 bankruptcy news

A number of restaurant chains have recently filed for Chapter 11 bankruptcy protection and come out the other side.

Red Lobster closed dozens of stores but continues to operate. The same thing happened with Hooters, Bucca di Beppo, On the Border, and TGI Fridays. Boston Market was not allowed to file for bankruptcy due to its owner not providing enough information and has essentially closed.

💵💰Don’t miss the move: Subscribe to TheStreet’s free daily newsletter💰💵

Bertucci’s currently sits under Chapter 11 bankruptcy protection and that chain has shrunk to about a third of its size at the height of its success. In addition, many fast-food franchisees, including chains representing hundreds of Burger King locations have filed their own bankruptcies.

Once a company asks a court for Chapter 11 bankruptcy protection, it buys itself time. That gives it a chance to negotiate with everyone it owes money to. For restaurants, that usually means banks, food distributors, landlords, and sometimes employees.

Related: Popular brewery abruptly shuts down all locations, no bankruptcy

Staying open either requires new funding or making deals with everyone the company owes money. If one debt-holder balks at the terms, that could throw the whole deal off and lead to a Chapter 7 bankruptcy liquidation.

That can happen when one or more of the groups owed money thinks they will be better off with their share of whatever an auction of the company’s assets brings in.

Now, a popular regional fast-food chain that filed for bankruptcy in September has learned whether it will continue to operate.

Eegee’s has become a regional tradition

Eegee’s may not be a national name, but it’s a well-known brand in Arizona with deep roots in the community.

“The Sonoran Desert is hot…And Tucson in September of ‘71 was no exception. Blistering pavement. Pools so warm they felt like bathwater. AC cranked to the max. Enter our founders to save the day (and all the days to come), driving around the city in their frozen lemonade vending truck, sweetening the moment at schools, sporting games and concerts with the silky smooth, frosty deliciousness of the now iconic eegee,” the company shared on its website.

And, while the eegee may have remained a local tradition, it’s one the chain has worked on developing over the years.

“Today, not only have we mastered our eegee to be the perfect blend of real fruit and frozen goodness, but we’ve also added iconic subs, such as the original grinder, along with salads, fries and ranch tasty enough to drink. (Seriously, we’ve seen it done), it added.

More Food:

• Applebee’s brings back all-you-can-eat deal to take down Chili’s
• Popular Mexican chain reveals surprising growth plans
• ​​Starbucks CEO shares plan for a whole new menu

The menu now offers eegees in lemon, strawberry, piña colada, skinny berry and a flavor of the month. There’s also a “fizz” version with a “touch of soda,” and a teagee version that’s mixed with iced tea.

Eegee’s also offers subs, sandwiches, salads, and more.

Eegee’s filed Chapter 11 bankruptcy, closed 5 locations

Eegee’s filed for Chapter 11 bankruptcy back in December. 

At the time of the filing, the company closed five of its locations, four in Tucson, and one in Phoenix. The closings affected 74 employees, but they were all offered positions at other locations, according to Eegee’s CEO Chris Westcott.

When the chain filed, it blamed its problems on the lingering impact of Covid. Westcott called the filing a “neccessary step,” but did not share any plans for how the chain planned to move forward.

The restaurant has shared that it has been purchases by an affiliate of Gladstone Capital Corporation.

Related: Beloved local family diner closing after nearly 40 years

“The acquisition was approved by the United States Bankruptcy Court for the District of Arizona, after the months-long Chapter 11 sale process. The chain consists of 25 restaurants in the Tucson and Phoenix areas. All of the locations will remain open and operational,” KGUN Tucson reported.

“We have a comprehensive plan and financial backing that will reinvigorate the iconic Eegee’s brand while keeping the best of its history. We will continue investing in what truly matters – our customers and the communities that Eegee’s has served for over 50 years,” Westcott shared.