Oct. 8 (UPI) — Restaurant chain Ruby Tuesday announced Wednesday it’s filing for Chapter 11 bankruptcy protection and closing 185 locations due to financial hardship brought on by the COVID-19 pandemic.
The company said it hopes the process will reduce debt so it can stay in business during the economic downturn.
The locations Ruby Tuesday plans to permanently shutter were already closed due to the pandemic.
“This announcement does not mean ‘Goodbye, Ruby Tuesday,'” CEO Shawn Lederman said. “Today’s actions will allow us an opportunity to reposition the company for long-term stability as we recover from the unprecedented impact of COVID-19.
“Our restructuring demonstrates a commitment to Ruby Tuesday’s future viability as we work to preserve thousands of team member jobs.”
Ruby Tuesday said it hopes to proceed through the bankruptcy process “as quickly as possible,” and operate “business as usual” at its remaining 236 locations.
The Maryville, Tenn.-based company employs about 7,300 people, most of whom have been furloughed during the health crisis.
Restaurants have been severely affected by restrictions to limit the spread of COVID-19. Most states issued issued orders in the spring banning all in-person dining at restaurants, but allowing delivery and to-go orders to continue.
Restaurants have been gradually reopening their dining rooms in some states, but some have limited capacity to allow for social distancing.
A study last month found that restaurants, coffee shops and bars are a prime area for transmission of the virus. The research found that newly ill people without any known exposure to COVID-19 were almost three times as likely to have patronized a restaurant over a two-week period, and almost four times as likely to have visited a bar or coffee shop, compared to those who weren’t infected.