ST. LOUIS — The owners of 70 Missouri and Illinois Jack in the Box restaurants filed for bankruptcy this week, citing competition and the coronavirus pandemic.
The Chapter 11 filings potentially affect 57 restaurants in Missouri, with 1,338 full- and part-time workers, and 13 restaurants in Illinois, with another 332 workers, but the filings say major creditors “have tentatively agreed to attend mediation” after the bankruptcy case is filed and lawyers have submitted motions so employees will still be paid.
Tuesday’s filing in St. Louis says the companies, Missouri Jack LLC and Illinois Jack LLC, were already feeling financial pressure from increased fast food competition that reduced market share and made it hard to find employees. The companies fell behind in payments on a loan from City National Bank, their largest creditor, and the bank filed a complaint earlier seeking more than $15 million due on several loans.
Then the coronavirus pandemic struck, the filings say, hurting business more.
The companies were negotiating, and proposed closing seven or eight unprofitable restaurants, but couldn’t strike an agreement with the bank, the filings say.
Missouri Jack owes $927,000 to its top 20 creditors, other than the bank and Jack in the Box, including $115,000 to Ameren and nearly $168,000 to American Express, according to court records. Illinois Jack owes nearly $170,000 to its top 20 creditors.
Both companies also owe vendors, various cities and others.
Missouri Jack and Illinois Jack are headquartered at 13768 Shoreline Drive in unincorporated St. Louis County. Their lawyer for the bankruptcy did not return an email seeking comment.
A holding company that included Jack in the Box restaurants was sold to St. Louis-based Ralston Purina in the late 1960s. Ralston Purina sold the restaurants in the mid 1980s.