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Concord, Calif.-based Round Table Pizza Inc., which filed for Chapter 11 protection in February, will emerge from bankruptcy this week, after confirming its consensual plan of reorganization Dec. 12.
The plan was approved by the U.S. Bankruptcy Court in Oakland, Calif.
It provides for 100-percent repayment of obligations to its secured and unsecured creditors and for its employee owners to retain full ownership of the company. The company is employee owned among 2,500 current and former employees.
"It is unusual, maybe unique, for a company to emerge from Chapter 11 in 10 months, pay all creditors 100 percent and preserve equity. The company's successful reorganization is a testament to the strength of the Round Table Pizza brand and to management's restructuring efforts and relentless focus on retaining ownership for its employee owners," said Scott McNutt, the company's bankruptcy attorney.
During 2011, the company successfully renegotiated leases, closed 22 unprofitable stores and improved profitability in its base business. The system continues with approximately 450 franchised and company-owned restaurants operating in the western U.S.
"This reorganization was made possible by the strength of our franchisees and the commitment of our employees. Their collective efforts significantly improved our operating cash flow and overall business results. It's an important turning point for us," said Rob McCourt, Round Table CEO.
McCourt expects the company's operating EBITDA in 2011 to increase 70 percent over the previous year. In November, company-owned restaurants completed their seventh consecutive month of sales increases.
Looking ahead, the company plans to open 10 new domestic locations in 2012 and recently signed a development agreement to open 20 restaurants in Vietnam. The first restaurant under this agreement is scheduled to open in Ho Chi Minh City in the first quarter of 2012. The company currently is in negotiations with more partners in other parts of Asia.
Round Table will add to its menu lineup this month with the introduction of its new Triple Play Pepperoni pizza. It will be supported by the tagline, "Three kinds of pepperoni, all kinds of flavor." Advertising for the new launch begins Dec. 26.
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