California-based restaurant chain operator files for bankruptcy as it blames state’s brutal wage laws
San Diego-based Cerca Trova Restaurant Group filed for Chapter 11 bankruptcy protection in Wilmington, Delaware, seeking relief from a $449 million debt burden. Operating 61 Outback Steakhouse locations primarily in California, the company blamed soaring labor costs, expensive food prices, and declining customer traffic for the financial collapse. The filing marks another severe blow to California's battered restaurant industry, following widespread store closures across the state and nationwide.
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- ✓ San Diego-based Cerca Trova Restaurant Group filed for Chapter 11 bankruptcy in US Bankruptcy Court in Wilmington, Del., on Monday.
- ✓ The company operated 61 Outback Steakhouse locations, mostly in California.
- ✓ Cerca Trova sought relief from a staggering $449 million debt burden.
- ✓ The operator cited expensive food and labor costs, California labor costs, and declining customer traffic as reasons for the filing.
What changed
Cerca Trova Restaurant Group officially filed for Chapter 11 bankruptcy in U.S. Bankruptcy Court in Delaware.
Live updates
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Outback Steakhouse Franchisee Cerca Trova Files for Bankruptcy
San Diego-based Cerca Trova Restaurant Group filed for Chapter 11 bankruptcy protection in Wilmington, Delaware, seeking relief from a $449 million debt burden. Operating 61 Outback Steakhouse locations primarily in California, the company blamed soaring labor costs, expensive food prices, and declining customer traffic for the financial collapse. The filing marks another severe blow to California's battered restaurant industry, following widespread store closures across the state and nationwide.
Why it matters
The bankruptcy filing highlights ongoing financial pressures within the restaurant sector, specifically driven by rising operational expenses and labor mandates. Cerca Trova, also known as Out West Restaurant Group, stated it has been struggling since the COVID-19 pandemic before finally seeking court protection from its massive debts.
What is confirmed
- San Diego-based Cerca Trova Restaurant Group filed for Chapter 11 bankruptcy in US Bankruptcy Court in Wilmington, Del., on Monday.
- The company operated 61 Outback Steakhouse locations, mostly in California.
- Cerca Trova sought relief from a staggering $449 million debt burden.
- The operator cited expensive food and labor costs, California labor costs, and declining customer traffic as reasons for the filing.
What to watch next
- Court decisions regarding Cerca Trova's restructuring plans and debt relief in Delaware bankruptcy court
- Further announcements concerning store closures and the operational status of remaining Outback Steakhouse locations
confidence 100%Sources used for this update (14)
- Fox Business — Outback Steakhouse franchisee files for bankruptcy
- Los Angeles Times — SoCal Outback Steakhouse franchisee files for bankruptcy, citing California’s labor costs
- Fast Company — Outback Steakhouse store closures: See a list of doomed locations as franchisee files for bankruptcy
- New York Post — California-based restaurant chain operator files for bankruptcy as it blames state’s brutal wage laws
- USA Today — Outback Steakhouse franchisee files for bankruptcy after closures
- Detroit Free Press — Outback Steakhouse franchisee files bankruptcy. Is Michigan affected?
- azcentral.com and The Arizona Republic — Outback Steakhouse closes stores across US, including these in Arizona
- nypost.com — Rising food costs prompt big Outback Steakhouse franchisee to ...
- www.latimes.com — Outback franchisee files for bankruptcy, citing California ...
- finance.yahoo.com — California-based restaurant chain operator files for ...
- www.chilichili.net — California-based restaurant chain operator files for ...
- www.avpress.com — Outback franchisee files for bankruptcy - avpress.com
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