Beloved Mexican Chain Files Bankruptcy In Midst Of Restaurant Closures

Rubio’s Coastal Grill has been serving up fresh and convenient Mexican dishes in the Southwest United States for the past 41 years. But the once-successful chain recently had to close 86 of its locations in California. Like many other restaurant chains, Rubio’s has had a hard time adjusting to the post-pandemic economy. More people than ever work from home, decreasing purchases by customers seeking a meal during lunch or dinner to-go on the way home from work. Rubio’s cited the high costs of operating a business in California as the main reason behind the restaurant closures. The cost of food and utilities has increased not just in California but across the globe, leading to insurmountable pressure on the longstanding restaurant chain. The company has announced that its bankruptcy filing is part of a larger plan to sell the business and let the buyer take over operations going forward. 

Bankruptcy is a complicated but effective legal process to clear debts and protect from creditors. Looking for a free bankruptcy consultation in the Las Vegas area? Call 702-842-0700 to schedule your free consultation with an experienced member of our team. 

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Rubio’s Coastal Grill Locations In Nevada

Nevada’s Rubio’s locations are not set to close due to the company’s recent chapter 11 bankruptcy filing. That means that for now, these jobs are safe, although that could all change after Rubio’s finds a buyer. There are currently 8 Rubio’s Coastal Grill restaurants located in Nevada. Their addresses are as follows:

  • Henderson- 1500 N. Green Valley Pkwy., Suite 210, Henderson NV 89074
  • Henderson- 1205 W. Sunset Rd., Suite 130, Henderson NV 89014
  • Las Vegas (Aliante Station Casino)- 7300 N. Aliante Pkwy, Las Vegas NV 89084
  • Las Vegas- 2390 E. Serene, Suite 700-6, Las Vegas NV 89123
  • Las Vegas- 7400 S. Henderson Blvd., Unit 22, Las Vegas NV 89123
  • Las Vegas- 7385 S. Rainbow Rd. #100, Las Vegas NV 89118
  • Las Vegas (Red Rock Station Casino)- 11101 W. Charleston Blvd., Las Vegas NV 89135
  • Las Vegas- 9310 W. Sahara Avenue, Suite 110, Las Vegas NV 89117

How Does Chapter 11 Bankruptcy Work?

Depending on how much you know about bankruptcy, you may be wondering how a company that files for bankruptcy is allowed to stay open and continue taking in money. Chapter 11 bankruptcy works much differently than chapter 7 bankruptcy, which is a liquidation bankruptcy that requires corporate debtors to shut down their businesses. In chapter 11 bankruptcy, there are many methods a company can use to whittle down debts and emerge from their bankruptcy case. Some companies may convert their equity into debt, either selling it to existing shareholders or allowing the public to reinvest in its comeback. Some companies will pivot their business strategies to more financially efficient methods, like switching focus from brick-and-mortar stores to online sales. Some companies may be able to find willing investors to provide financing despite the bankruptcy filing. Regardless of the chosen method, the plan to emerge from bankruptcy will be submitted to the court. If the company doesn’t qualify for a small business case, the plan will also need to be approved by the creditor committee. This is a group of the company’s top creditors that will vote on major business decisions while the bankruptcy case is active. The company will maintain control of its regular daily operations. 

Unlike chapter 7 and chapter 13 bankruptcy, there isn’t a set time frame for chapter 11 bankruptcy. Chapter 7 bankruptcy cases typically last about 3 to 6 months from start to finish. A chapter 13 bankruptcy payment plan will always last either 3 or 5 years. Chapter 11 bankruptcy takes as long as it takes- most cases take several months to identify an agreeable business plan, have it approved, and begin execution. Using a small business filing, or a subchapter V filing, can speed up the process as they have faster deadlines and don’t require a creditor committee. A debtor must have $3,024,725 in debt or less to qualify for a small business case. To qualify for a subchapter V chapter 11 bankruptcy filing, the business must have $7.5 million or less in debt. For both, at least 50% of the debt must have arisen from commercial or business activities of the debtor. 

Other Restaurant Industry Bankruptcy Filings

Rubio’s filing for chapter 11 bankruptcy is just one example of a recent increase in corporate bankruptcy filings. All types of businesses are struggling in the post-pandemic economy, but the restaurant industry has its own unique obstacles. Some of the other restaurants that filed for bankruptcy during or after the pandemic include: 

  • Red Lobster: This popular seafood chain declared chapter 11 bankruptcy in May 2024. The restaurant never fully recovered from the pandemic, and was then plagued by a series of misfires like an all-you-can-eat shrimp deal that ended up costing the company more than it earned. Many of its locations across the country have began shutting down while the fate of the company is decided. 
  • Corner Bakery: This fast-casual chain filed for bankruptcy in February 2023 and was purchased in June 2023. It closed one-fourth of its locations for a total of 138 locations, which were acquired by SSCP Management. The purchase price was $15 million, and SSCP had to take on some of Corner Bakery’s $20-24 million liabilities. SSCP Management previously employed a similar strategy with Cici’s Pizza. 
  • California Pizza Kitchen: This pizza chain was pushed into bankruptcy by the COVID-19 pandemic. Despite its presence in the frozen pizza market, it filed for bankruptcy in 2020 with more than $400 million in debt. It was able to offload more than $220 million in debt through its chapter 11 bankruptcy filing. California Pizza Kitchen emerged from bankruptcy using a debt-to-equity maneuver. 
  • Chuck E. Cheese Pizza: This pizza restaurant known for its signature animatronic mouse was able to clear a whopping $705 million in debt through its bankruptcy filing (through its parent company, CEC Entertainment). This bankruptcy came in June 2020, another victim of the COVID-19 pandemic. CEC Entertainment emerged from bankruptcy on December 30, 2020. At that time, it still had 559 Chuck E. Cheese locations and 122 Peter Piper Pizza locations. 

Don’t Know Where To Start For a Chapter 7 Or Chapter 13 Filing In Las Vegas, Nevada? Contact Our Firm For Your Free Consultation.

Bankruptcy can help anyone struggling with debt, whether it’s a multimillion-dollar corporation or a family just doing their best to get by. But chapter 11 bankruptcy is usually best left to businesses and individuals with extremely substantial assets and liabilities. If your debts and assets are measured by the thousands rather than the millions, your needs will probably be best served by chapter 7 or chapter 13. Both have their own benefits and drawbacks, as well as qualifications and restrictions that could result in a debtor’s case being dismissed if overlooked. Our bankruptcy team strives to simplify every step of the process so you can experience maximum debt relief with minimum stress and effort. Clear any doubts and confusions you may have about bankruptcy by having your questions answered by an experienced professional. At Vegas Bankruptcy Lawyers, your initial consultation by phone is 100% free. See if you qualify for bankruptcy, and if so, our flexible payment plan options starting as low as Zero Dollars Down. To get started, contact us today or call 702-842-0700

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