Cash-strapped deli operator Schlotzsky's (BUNZ) filed for Chapter 11 bankruptcy protection Tuesday.
The San Antonio, Texas, sandwich shop franchiser reported liabilities of $71.3 million and assets of $111.7 million, including $64.8 million of intangible assets, according to the court filing. The company reported a net loss of $11.7 million in 2003, compared with a net loss of $199,000 in 2002 and a net loss of $671,000 in the first quarter of 2004.
"Today we have taken an important step toward creating a stronger Schlotzsky's," said CEO Sam Coats. "It became apparent to our board that this action was necessary to protect Schlotzsky's from millions of dollars in claims, judgments and debts accumulated during the past few years, while enabling us to restructure the company. I believe the actions taken by the board took great courage and are clearly in the best interest of the company."
The company said its goals are to "make money by selling the world's best sandwich, simplify our operation, obtain the financial resources to grow our franchise system, and make certain that our valued franchisees get the support, training and encouragement they are entitled to receive."
Schlotzsky's also cut 15 jobs. On Tuesday, its stock was unchanged at $1.65.