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Bankruptcy Law Blog

Monday, July 27, 2020

Beloved Burger Chain Files For Bankruptcy

For the second time in less than 25 years, Krystal Company and its famous square burgers have emerged from bankruptcy. The fast food chain filed for Chapter 11 bankruptcy in January, and exited with a new owner in late May.

Krystal is the second-oldest fast food chain in the United States. It was founded in Chattanooga in 1932. Only White Castle, which was founded in Kansas in 1921, is older. Unlike White Castle, it has not expanded across the country, or been the setting of a Hollywood film. But it is beloved here in the Southeast, with multiple locations in the Mobile area.

Krystal Closed Over 40 Locations Just Last Year

When Krystal announced its bankruptcy back in January, many were worried this was the end. Last year, the company closed over 40 locations. The year before, it used a $59.8 million investment to pay off debts, and do some remodeling and marketing. If those tactics didn’t help put the company on the right path, what more could be done?

But that is what bankruptcy is for. When a business files under Chapter 11 or an individual or family files under Chapter 13, they have the opportunity to retool and restructure so they can get back on the right path.

As Krystal said in a statement at the time of its filing, “The actions we are taking are intended to enable Krystal to establish a stronger business for the future and to achieve a restructuring in a fast and efficient manner. We are pleased to be ready to move towards a brighter future for the brand and have the support of our stakeholders."

Families don’t put out statements like this when they file for bankruptcy, but if they did it might read something like this:

“Our family intends to use the Chapter 13 process to get back on firm financial footing. The court-supervised repayment plan we are entering into will allow us to get caught up on our debts, while holding on to assets that are important to our family, including our home and our car. We know only some of our debts will be forgiven, but we feel this process is better for us in the long term than going through Chapter 7 would be. We are looking forward to a brighter future.”

Yes, it’s a little over the top, but remember, families don’t actually put out statements when they file for bankruptcy. Although maybe they should. Many people who contact our office because they are thinking about filing for bankruptcy do not realize that going through a restructuring and repayment process similar to what companies do is an option.

Gone are the days when filing for bankruptcy meant giving up most of your assets and starting over from scratch. People can now take advantage of the bankruptcy benefits that companies have enjoyed for years. If your family is struggling to make ends meet, the Padgett & Robertson team can help you figure out if filing for bankruptcy may be a wise choice. Contact us today to schedule a free initial consultation.


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Padgett and Robertson assist clients with Bankruptcy, Personal Bankruptcy, Consumer Bankruptcy, Chapter 7 Bankruptcy, Chapter 13 Bankruptcy and The New Bankruptcy Law in Mobile, Alabama and throughout southern Alabama. Alabama State Bar Association Regulations require the following: "No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers." 11 U.S.C. 528 of the U.S. Bankruptcy Code requires the following: "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”



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Alabama State Bar Association Regulations require the following: "No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers." 11 U.S.C. 528 of the U.S. Bankruptcy Code requires the following: "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”