Last month, Prandium announced plans to seek a buyer for its chain of 14 mid-price Hamburger Hamlet restaurants in Southern California and Washington, D.C. Though the Hamburger Hamlet chain is doing well and its performance justifies expansion, Prandium said in a statement that the parent company "does not have the resources at this time" to fund the burger chain's growth.
About half of the 40 jobs Prandium plans to eliminate are at the company's Irvine headquarters. Most of the others will come at its Chi-Chi's subsidiary office in Louisville, KY.
As part of the shakeup, Kevin S. Relyea—a restaurant industry veteran who serves as Prandium's chairman and president of Chi-Chi's—will also become Koo Koo Roo's president. He will replace Gayle A. DeBrosse because, Relyea says in a statement released last Friday, he and DeBrosse have agreed that the company "cannot afford two presidents."
GlobeSt.com reported in February that Prandium had defaulted on some of its debt obligations. The company told the SEC last month that efforts to restructure its debt are continuing, and that filing for federal bankruptcy protection may be required if a deal with its lenders cannot be worked out.
However, Prandium said in its SEC statement that "even if the company does reach an agreement with its creditors, the filing of a Chapter 11 case may become necessary to implement the terms of such an agreement." Prandium's stock, which now is traded on the OTC Bulletin Board, fell 10% on Friday to about 4.5 cents a share.
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