Close up of bankruptcy petition

Comfort food in a casual dining setting is getting increasingly difficult to find and may become more so. Buffets LLC, which owns a number of restaurant chains, filed for Chapter 11 bankruptcy on March 7. This is the third time that the company has sought bankruptcy protection since 2008.

While Buffets LLC, which is based in Texas, likely doesn't ring a bell to many people, its restaurants are known throughout the country for family dining, often all-you-can-eat meals, and hearty fare. They include HomeTown Buffet, Old Country Buffet and Tahoe Joe's.

Changing Eating Habits and a Lawsuit to Blame for Rising Debt

In part, the company's eateries have fallen victim to its customer base's decreasing propensity to dine out. Its sales have reportedly dropped 22 percent this year. However, the company is also facing a legal judgment of over $11 million as the result of a lawsuit in Wyoming. This is one of the reasons behind the Chapter 11 filing.

In all, the company owns 150 restaurants in half the states in the country. However, that's down from over 300 restaurants in 35 states. The company has been closing restaurants in an attempt to remain financially viable. Almost 100 were closed just before the company filed for bankruptcy.

Last summer, Buffets LLC merged with Alamo Ovation LLC. However that company and two related holding companies have not filed for bankruptcy. The company got rid of $255 million in debt when it last emerged from bankruptcy in 2012. However, in this latest filing, its debts were listed as somewhere between $50 million and $100 million, while its assets were listed as under $50 million.

What Is the Road to Financial Health?

Buffets LLC has hired a chief restructuring officer. According to court documents, company officials believe that they can become profitable, once again, when the outstanding judgment has been dealt with and its unprofitable restaurants have been sold.

The restaurant business can be a particularly volatile one as tastes change. In addition, when families need to tighten their belts, dining out can be one of the first areas in which they cut back. With the help of experienced bankruptcy attorneys as well as restructuring specialists, companies can emerge from bankruptcy leaner and financially healthier.