(Bloomberg) — On The Border Mexican Grill & Cantina became the latest US casual-dining chain to file for bankruptcy amid surging labor costs, falling customer traffic and inflationary pressures.
Atlanta-based OTB Holding sought Chapter 11 protection in Georgia on Tuesday, according to court papers. It listed $10 million to $50 million in both estimated assets and liabilities.
Founded in Dallas in 1982, the Tex-Mex chain has more than 80 restaurants in the US and South Korea, where it opened its first location 18 years ago. It had 160 locations when Chili’s Grill & Bar parent Brinker International Inc. sold the chain in 2010, OTB Chief Restructuring Officer Jonathan Tibus wrote in a separate court filing.
A “rapid loss of liquidity” in recent months prompted the company to not pay certain bills, “unsurprisingly” resulting in vendors and landlords cutting off goods and services, he said. The chain recently closed 40 locations.
Restaurant companies or franchisees last year filed for credit protection at levels not seen since 2020, according to BankruptcyData, given industywide cost pressures and strained consumers.
OTB last month obtained $4 million of bridge financing, and its provider is expected to be the firm’s DIP lender as well and submit a stalking-horse credit bid to acquire the chain’s assets.
OTB employs about 2,800 people, according to Tibus’ filing. Initial court requests include permission to pay the workers’ wage and continue its customer-rewards program. Alvarez & Marsal is providing restructuring advice, and King & Spalding was hired as bankruptcy counsel.
The case is OTB Holding LLC, case number 25-52415, U.S. Bankruptcy Court Northern District of Georgia (Atlanta)
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