Mexican food chain On The Border closes 40 restaurants, files for bankruptcy protection
On the Border Mexican Grill & Cantina filed for Chapter 11 bankruptcy protection this week after closing dozens of restaurants last month, court documents show.
At the time of filing, On the Border had 60 company-operated restaurants and listed estimated assets and estimated liabilities between $10 million and $50 million. According to court records, the company has more than $19 million in “prepetition-funded debt.”
OTB Holdings Chief Restructuring Officer Jonathan Tibus said the bankruptcy had been brought upon by difficult economic conditions, labor shortages, underperforming restaurants, and creditor enforcement actions, according to records viewed by Paste BN.
In the same filings, Tibus said the company, along with debtors, had decided in late February to close 40 "non-performing" stores.
Red Lobster, TGI Friday’s and more
On The Border joins other casual chain restaurants that have faced difficulties and filed for bankruptcy in recent months.
In mid-June 2024, seafood restaurant chain Red Lobster filed for Chapter 11 bankruptcy in Florida. In a statement released at the time the company said it intended to use the proceedings to "drive operational improvements, simplify the business through a reduction in locations, and pursue a sale of substantially all of its assets." But only months later the company announced that it was exiting Chapter 11 bankruptcy after a federal judge approved the chain's plan.
In November 2024, TGI Friday announced it was also filing for Chapter 11 bankruptcy protection, citing the COVID-19 pandemic among its business challenges. "This restructuring will allow our go-forward restaurants to proceed with an optimized corporate infrastructure that enables them to reach their full potential," said Rohit Manocha, the executive chairman of TGI Fridays Inc., in a press release at the time.
Bucca di Beppo filed for bankruptcy in August 2024, citing rising costs and hiring difficulty, according to information from the restaurant and court papers filed in the U.S. Bankruptcy Court for the Northern District of Texas.
Contributing: Julia Gomez, Natalie Neysa Alund, Jonathan Limehouse and Mike Snider
Fernando Cervantes Jr. is a trending news reporter for Paste BN. Reach him at fernando.cervantes@gannett.com and follow him on X @fern_cerv_.