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Rubio’s Restaurants Inc., the fast-casual chain known for its fish tacos, filed for chapter 11 protection yesterday with plans to cut debt and hand ownership to its lenders, Bloomberg News reported. The company, which operates 167 restaurants in Arizona, Nevada and California, defaulted on some of its debt in June after pandemic-related shutdowns slammed sales. But the chain was already grappling with cutthroat competition in the fast-casual segment, increased labor costs and a faltering expansion to new markets, according to court papers. Golub Capital, the company’s pre-bankruptcy secured lender, has agreed to provide an $8 million loan to help Rubio’s cover expenses during bankruptcy. Private equity firm Mill Road Capital, which owns Rubio’s, has agreed to provide an additional $6 million of equity financing as part of its bankruptcy plan, court papers show. Rubio’s employs more than 3,400 people across its restaurants and corporate offices. Between May and June, the Carlsbad, California-based company permanently closed 26 under-performing stores in California, Arizona, Colorado and Florida, according to court papers.

Ed’s Beans Inc., the parent company of Cranberry-based Crazy Mocha and Kiva Han Coffee, filed for chapter 11 protection this week, claiming it owes more than $4.75 million to more than 50 creditors, the Pittsburgh Post-Gazette reported. Total assets owned by the company fall in the $100,000 to $500,00 range, according to the court filing. The petition, filed Monday in the U.S. Bankruptcy Court for the Western District of Pennsylvania, indicates that the company’s biggest creditor, First Commonwealth Bank, is owed $2.4 million. The founder of Crazy Mocha, Ken Zeff, who sold the company two years ago to Ed’s Beans, is owed $685,000. Zeff started the company in 2000 and sold the chain in March 2018 to Ed Wethli, owner of Ed’s Beans. For years, the Pittsburgh-born coffee chain held its own against a national brand like Starbucks and several other independent coffee shops in the competitive Downtown market and beyond the city limits into the suburbs. COVID-19 turned the tables on Crazy Mocha and wreaked havoc on coffee shops across the country due to social distancing limitations and rules that were put in place to protect staff and customers from infection.

Lonestar Resources US Inc. filed for chapter 11 protection yesterday, becoming the latest energy company to succumb to high debt, lagging crude prices and dismal fuel demand due to the COVID-19 pandemic, Reuters reported. The company’s assets and liabilities were in the range of $500 million to $1 billion, according to a court filing in the U.S. Bankruptcy Court for the Southern District of Texas. The Texas-based shale driller had announced a restructuring support agreement in September with its largest shareholders to eliminate about $390 million in debt obligations and preferred equity interests. The new coronavirus-led lockdowns, which decimated travel and fuel demand, have forced many shale producers to halt oil drilling, leaving them with no source of cash to repay their massive debts.

Oasis Petroleum Inc. filed for chapter 11 protection today, the latest U.S. shale producer to seek court-aided restructuring as the energy industry reels from an unprecedented crash in oil prices caused by the COVID-19 pandemic, Reuters reported. The company listed assets and liabilities in the range of $1 billion to $10 billion, according to a court filing. Oasis said it secured $450 million in debtor-in-possession financing and expects to cut debt by $1.8 billion through the restructuring. It had long-term debt of $2.76 billion with just $77.4 million in cash and cash equivalents as of June 30. Oasis said upstream operations and production would continue normally as restructuring happens, adding that its independent pipeline company Oasis Midstream Partners LP and other subsidiaries in which it owns an equity interest are not included in chapter 11 proceedings. 

Noble Corp., an operator of offshore oil-and-gas drilling rigs, has settled multibillion-dollar litigation over its 2014 spinoff of Paragon Offshore PLC, a critical step in Noble’s path to exiting bankruptcy, WSJ Pro Bankruptcy reported. The settlement with a trust that benefits Paragon creditors sets up two options: Noble will either pay $10 million as part of a global settlement of the litigation or it will pay $7.5 million to resolve only the claim against the company and its affiliates, while allowing the lawsuit to proceed against insurance carriers covering its current and former directors and officers, according to papers filed Wednesday in the U.S. Bankruptcy Court in Houston. With a settlement in hand, Noble said it is well positioned to move ahead with a chapter 11 plan that cuts its debt and preserves about 1,600 jobs “during remarkably turbulent economic times.” The trust set up to represent Paragon creditors was seeking more than $2.6 billion in damages, accusing Noble of loading Paragon with old rigs and an unsustainable amount of debt before spinning it off. Paragon filed for chapter 11 protection less than two years after the spinoff. London-based Noble, which has denied the allegations, said the settlement is “exceptionally favorable” to Paragon and its creditors while avoiding the time and expense of a trial over the spinoff.

The operator of New York City’s historic Martinique hotel, one of Manhattan’s oldest, filed for chapter 11 protection, hoping for relief from rent payments and union obligations as the Covid-19 pandemic hammers the Big Apple’s lodging market, the Wall Street Journal reported. Built in 1897 in a French Renaissance style at 32nd Street and Broadway, the Martinique earned a notorious reputation as a “welfare hotel” in the 1970s and ’80s, when municipal leaders used it to house the city’s burgeoning homeless population. Developer Harold Thurman acquired the Martinique in a 99-year lease in 1989, a year after the city stopped using the hotel for emergency housing. Reborn under the Holiday Inn banner, the Martinique was designated a city landmark in 1998. He still owns the hotel. The 531-room Martinique, now carrying the Hilton brand, features a restaurant and wine bar, more than 33,000 square feet of retail space and a concierge desk, according to court papers filed by Brad Thurman, vice president of Herald Hotel Associates LP, the hotel’s operator. In addition to the pandemic’s devastating impact on hotel occupancy, he blamed the Martinique’s financial woes on a $3.5 million employee severance bill and a failure to strike deals with the hotel’s landlord, Seasons Affiliates, and mortgage lender. (Subscription required.)

Candy store chain It’Sugar filed for chapter 11 protection on Tuesday, citing its inability to make up for sales amid the COVID-19 pandemic, the Las Vegas Review-Journal reported. It’Sugar, a Florida-based company owned by BBX Capital Corp., said its four locations in Las Vegas, including its U.S. flagship location on the Strip, will remain open while the company goes through bankruptcy proceedings. The retailer shuttered its approximately 100 locations nationwide in March because of the pandemic and opened in June and July, but sales haven’t improved. It’Sugar said that 60 percent of its annual sales are related to travel and tourism. According to court documents, most of It’Sugar’s unsecured debt claims are from landlords, including $502,973.28 in rent money owed for the Grand Bazaar Shops store and $458,238.36 to the Grand Canal Shoppes. The company stopped paying rent or has only made partial payments as company executives tried to negotiate deferment or abatement deals with its landlords, according to Levan. “This has not occurred and resulted in the decision to file bankruptcy proceedings,” he said.

Sizzler USA filed for bankruptcy yesterday, the latest casual dining chain to fall victim to the effects of the COVID-19 pandemic, WSJ Pro Bankruptcy reported. One of the earliest affordable steakhouses, Sizzler USA was a cultural staple for decades. It experienced its heyday in the late 1970s and early ’80s but its chain of largely franchised operations shrank in recent years. The company said that its franchised locations, numbering more than 90, aren’t affected by the bankruptcy filing. Sizzler added that it plans to keep the 14 company-owned locations operating during the bankruptcy process, which is aimed at renegotiating leases. Sizzler President Chris Perkins blamed the bankruptcy filing on temporary restaurant closures due to the pandemic and landlords’ unwillingness to abate rents despite the company’s financial distress. Founded in 1958, the Mission Viejo, Calif., company mainly has locations in the western U.S. It later expanded to include seafood and salad bars, chasing newer rivals like Bonanza and Ponderosa steakhouses. In papers filed in the U.S. Bankruptcy Court for the Northern District of California, Sizzlers estimated both its assets and debts at less than $10 million. Yesterday’s bankruptcy filing was the second for Sizzler, which sought chapter 11 protection in 1996.

Auto-parts manufacturer Garrett Motion Inc. filed for bankruptcy over a pandemic-driven sales drop and a dispute with Honeywell International Inc., proposing a $2.1 billion sale of the business to private-equity firm KPS Capital Partners LP, WSJ Pro Bankruptcy reported. Switzerland-based Garrett said that it would tap KPS as the stalking-horse bidder to acquire the company’s assets following its chapter 11 filing on Sunday in the U.S. Bankruptcy Court in Manhattan. The company turned to chapter 11 amid a dispute with former parent Honeywell over the costs of defending and settling personal-injury claims from workers and others exposed to asbestos-containing products. The coronavirus pandemic also has pressured Garrett along with other auto suppliers throughout the U.S. as car makers have slowed down production, laid off workers and burned through cash. “Although the fundamentals of our business are strong and we have continued to try to develop our business strategy, the financial strains of the heavy debt load and liabilities we inherited in the spin-off from Honeywell — all exacerbated by COVID-19 — have created a significant long-term burden on our business,” Garrett President and Chief Executive Olivier Rabiller said.