Debtors are operating their businesses and managing their properties as debtors in possession
pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. No trustee, examiner or
statutory committee has yet been appointed in these Chapter 11 Cases.
5.The Debtors’ principal business is the operation of a western-stylerestaurant chain. Originally formed in 1977, the Claim Jumper chain consists of
as of the Petition Date operating in the states of California, Arizona, Colorado, Illinois, Nevada,Oregon, Washington and Wisconsin.
The Debtors’ corporate headquarters are located in Irvine, California.
Events Leading to Filing
In late 2006, following a stock buyout transaction and internal corporaterestructuring, the Debtors continued to pursue their then existing strategy of expanding their
business by opening new restaurant locations. Between 2006 and 2008, the Debtors opened 10
new locations, resulting in a total of 46 restaurants (one of which has now been closed), and
spent $62.9 million in construction costs associated with opening these locations. The primary
funding source for the expansion and construction costs was
million in borrowings under the
Debtors’ prepetition credit facilities.8.
Despite their efforts to expand and increase revenues, in 2007, the Debtorsbegan to experience a prolonged downturn in their revenues and profits, coinciding with the
broader economic downturn in the United States. In fact, the Debtors’ financial performance
worsened in each of fiscal years 2007, 2008, and 2009, with declines in annual revenues and,eventually, diminishing annual operating profits.
9.The Debtors attribute these declines to several factors. More than
the Debtors’ restaurants are located in California, Arizona and Nevada communities that have