Texas-based sandwich chain, Schlotzsky's, files for bankruptcy
Tuesday, August 3rd 2004, 11:00 am
By: News On 6
AUSTIN (AP) _ Schlotzsky's, Inc., an Austin-based deli franchiser, filed for voluntary Chapter 11 bankruptcy protection Tuesday.
Schlotzsky's, which operates 513 restaurants in 36 states and six countries, said operations at its company-operated and franchisee-operated stores would not change during the financial restructuring.
Schlotzsky's cut 20 percent of its corporate staff and closed 15 of its corporate-operated shops in July.
The deli reported a net loss of $11.7 million in 2003. That compares to a net loss of $199,000 in 2002 and a net loss of $671,000 in the first quarter of 2004.
``It became apparent to our board that this action was necessary to protect Schlotzsky's from millions of dollars in claims, judgments, and debts accumulated during the past few years, while enabling us to restructure the company,'' Sam Coats, Schlotzsky's president and CEO, said after the filing was made in U.S. Bankruptcy Court in San Antonio.
``I believe the actions taken by the board took great courage and are clearly in the best interest of the company,'' Coats said.