Ruby’s Diners Inc. intends to file for bankruptcy protection next week, just days after it put some of some of its Southern California restaurants into chapter 11 to fend off a bid by one of its lenders to foreclose on its assets, WSJ Pro Bankruptcy reported. Bankruptcy lawyer William Lobel told a judge on Friday that Ruby’s Diner Inc. would file for bankruptcy on Tuesday. Lobel, a lawyer at Pachulski Stang Ziehl & Jones, was speaking at the initial hearing of Ruby’s SoCal Diners LLC. He said his team had “been burning the midnight oil” to place the Ruby’s Diner subsidiary and five of its company-owned restaurants into chapter 11 in U.S. Bankruptcy Court in Santa Ana, Calif. Douglas S. Cavanaugh, Ruby’s founder and chief executive, said in a declaration with the court that the chapter 11 filing was prompted by a bid by lender Opus Bank for the appointment of a receiver. The bank, which had loaned Ruby’s $5.9 million, claimed Ruby’s was in breach of its lending agreements. The bank is seeking a receiver so it can foreclose on the restaurants.
