Facing financial difficulties and rising costs, Hooters, known for its waitstaff and wings, filed for Chapter 11 bankruptcy. The company plans to sell its 100 company-owned restaurants to two franchisee groups, aiming for a swift exit from bankruptcy within 90-120 days. This restructuring, involving a founder-led buyout, intends to return the brand to its roots and improve its financial stability. While business operations continue, Hooters is evaluating its operational footprint, potentially leading to further location closures.
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Following a failed attempt to secure a buyer willing to maintain its operations, Joann Fabrics will close all 800 of its stores nationwide. A nationwide going-out-of-business sale will commence immediately, as mandated by the winning bidder in the asset auction. Despite exploring all options to remain operational, the company will now wind down its operations after more than 80 years. Founded during World War II, Joann experienced periods of both success and financial struggles, ultimately succumbing to declining sales and filing for Chapter 11 bankruptcy protection twice. The company will work to minimize the impact on its 19,000 employees and customers during this closure.
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Prospect Medical Holdings, a Los Angeles-based hospital system, filed for Chapter 11 bankruptcy, listing over $400 million in debt. This follows a similar collapse of Steward Health Care, also a private equity-owned system, highlighting a pattern of financial mismanagement within the industry. Both companies utilized hospital real estate value to finance large payouts to investors, diverting funds from patient care, a practice criticized in a recent Senate report. Despite claims of significant investment and charity care, the bankruptcy underscores concerns about private equity’s impact on community hospitals and access to healthcare.
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John Q. Hosedrinker