Boston Chicken Voluntarily Reorganizes; Some Restaurants Will BeClosed.Boston Chicken, Inc., a restaurant chain that caters to consumers' desire for homestyle chicken dinners, filed for bankruptcy reorganization as it struggles to turn around sagging sag v. sagged, sag·ging, sags v.intr. 1. To sink, droop, or settle from pressure or weight. 2. sales by closing 16 percent of its restaurants, eliminating debt and adding offerings to its menu. The company, which two years ago changed the name of its restaurants to Boston Markets Boston Market (known before 1995 as Boston Chicken), headquartered in Golden, Colorado, is a chain of American fast-food restaurants. Founded in December 1985 in Newton, Massachusetts, the chain grew rapidly in the early and mid-1990s, filed bankruptcy in the late 1990s, and , has suffered from weak sales and profits as a result of increased competition, primarily from grocery chains offering ready-to-eat meals, industry analysts said. The declining sales also made it more difficult for Boston Chicken, based in Golden, Colo., to continue expanding because it could no longer provide loans to franchisees in its aggressive move to open more restaurants. The chain said it would close 178 of its 1,143 restaurants, officials said, but more than 950 Boston Market restaurants in nearly 90 cities nationwide remain open. Most of the closed restaurants are scattered throughout the country. Virtually all employees from closed Boston Market restaurants will be transferred to nearby Boston Market locations, officials said. The company also said that it does not anticipate any material effect on the operations of Einstein/Noah Bagel Corp. (ENBC), Boston Chicken's 51 percent-owned subsidiary, as a result of the filing. ENBC owns and operates retail bagel stores under the Einstein Bros BROS Brothers BROS Benefits and Retirement Operations Section (King County, Washington) BROS Barnes and Richmond Operatic Society (London, UK) . Bagels and Noah's New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Bagels trade names. For the past three months, the company has been discussing its restructuring plan with a committee representing its three classes of public subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". , which total approximately $625 million. The committee indicated its support of management and its general support of a plan to convert the bonds and certain other unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. into the common stock of the reorganized re·or·gan·ize v. re·or·gan·ized, re·or·gan·iz·ing, re·or·gan·iz·es v.tr. To organize again or anew. v.intr. To undergo or effect changes in organization. company, said officials. The company plans to have $300 to $350 million in debt when it emerges from bankruptcy, said a Boston Chicken spokesperson. Boston Chicken says it has already begun to make changes under chief executive J. Michael Jenkins, who joined the company about five months ago. Jenkins has already eliminated discount coupons that hurt sales, cut advertising and has 100 new products, including desserts, in testing. A Boston Chicken spokesperson said the company plans to introduce 50 new side orders that can be rotated seasonally. |
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