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Common Concerns & Questions About Bankruptcy

Tex-Mex restaurant chain files for Chapter 11 in Texas

| Oct 21, 2016 | Chapter 11 |

Texans are known for their independence and determination and that goes beyond personal endeavors and all the way into business dealings. Unfortunately, even those who have the best ideas or the most well-crafted plans might run into financial problems when they are trying to run a business, and their bills might rack up too fast to keep up with them. When creditors are in pursuit of payment and the income is not where it needs to be to maintain a balanced budget, a business bankruptcy might be necessary to get back on track. Regardless of the type of business it is, this is an option that business owners should consider.

The chain restaurant Don Pablo’s has filed for Chapter 11 bankruptcy. The casual Tex-Mex chain has stated that growing competition from other restaurants selling similar fare, and the overall decline in the “fast-casual” category, has contributed to the chain’s struggles. The corporation that runs the restaurants, Rita Restaurant Corp., which owns the Don Pablo’s chain, filed for bankruptcy U.S. Bankruptcy Court in San Antonio. The corporation runs 16 Don Pablo’s restaurants in 10 states. This is the latest in a series of filings of similar dining chains that offer different cuisine options.

Don Pablo’s was feeling the pressure of numerous different chains that offer the same type of foods that it does as well as other chains that might not be as focused on the same menu items as Don Pablo’s, but offer menu options that do compete with it. The company was formed in 1985 in Texas and, by the late 1990s, there were approximately 120 Don Pablo’s across the nation. The restaurant is privately held.

Businesses small and large have to be cognizant of the risks they face when they are trying to stay afloat. Regardless of whether it is a family business, an LLC, a partnership or is in another form, the debts that can accumulate can cause many problems unless they are dealt with swiftly and decisively. Although many might view bankruptcy as a negative, the truth is that filing for Chapter 11 bankruptcy can be a smart way to get back on stronger ground and perhaps continue the business. No matter the situation, Chapter 11 is something to consider for a business owner, and an experienced bankruptcy lawyer can help.

Source: Wall Street Journal, “Owner of Don Pablo’s Restaurants Files for Bankruptcy,” Patrick Fitzgerald, Oct. 5, 2016