Star Buffet, Inc. Files for Protection Under Chapter 11 to Restructure Operations
30 Septembre 2011 - 2:17AM
Star Buffet, Inc. (Pink Sheets:STRZ) announced today that the
company, along with its wholly-owned Summit Family Restaurants Inc.
subsidiary, has filed for a voluntary petition for relief under
Chapter 11 of the United States Bankruptcy Code ("Bankruptcy Code")
in the United States Bankruptcy Court in the state of Arizona
("Bankruptcy Court"). The company will continue to operate in
the ordinary course of business as "debtor-in-possession" under
jurisdiction of the Bankruptcy Court and in accordance with the
applicable provisions of the Bankruptcy Code and the orders of the
Bankruptcy Court. No other subsidiaries of the company are
impacted by this filing.
The decision to file bankruptcy was reached after the company
was unable to agree on terms for payment of a $723,489.02 judgment
against the company. The company plans to appeal the
judgment. Additionally, although the company is profitable and
has significant equity in its real estate portfolio, it has been
unable to refinance current mortgage obligations or a Wells Fargo
secured credit facility due in January, 2012.
The company's consolidated balance sheet as of August 15, 2011
showed assets of $22.4 million and liabilities of $21.4
million. For the last fiscal year, the company had annual
revenues of approximately $53.0 million. At the time of the
filing, the company was current in its payment obligations on its
$5.6 million Wells Fargo secured credit facility and $5.4 million
in mortgage loans. The company believes that cash flow from
operations will provide it and its subsidiaries with sufficient
liquidity to meet their post-petition obligations and maintain
normal operations. The company plans to aggressively pursue
its planned exit financing strategy.
Safe Harbor Statement
Statements that are not historical facts contained in this
release are forward-looking statements that involve risks and
uncertainties, and actual results could vary materially from the
descriptions contained herein due to many factors, including, but
not limited to, product demand and market acceptance risks, the
effect of economic conditions, the impact of competitive products
and pricing, the results of financing efforts, implementation of
the company's acquisition and strategic alliance strategy, the
effect of the company's accounting policies and other risks
detailed in the company's Form 10-K for its fiscal year ended
January 25, 2010 and other filings with the Securities
and Exchange Commission. Copies of all of the company's filings
with the SEC are available to the public on the SEC's web site at
http://www.sec.gov. The company undertakes no obligation to update
any forward-looking statements.
About Star Buffet
Star Buffet is a multi-concept restaurant operator. As of
September 29, 2011, Star Buffet, through its subsidiaries, operates
seven 4B's restaurants, seven JB's restaurants, four Barnhill's
Buffet restaurants, three K-BOB'S Steakhouses, two HomeTown
Buffets, one Casa Bonita Mexican theme restaurant, one Whistle
Junction restaurant, one BuddyFreddys restaurant, one Western
Sizzlin restaurant, one Holiday House restaurant, one JJ North's
Grand Buffet, one Pecos Diamond Steakhouse and one Bar-H
Steakhouse.
CONTACT: Robert E. Wheaton
President, CEO
Star Buffet, Inc.
(480) 425-0397
Star Buffet (CE) (USOTC:STRZ)
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