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Parent Company of Outback Steakhouse May Face Bankruptcy


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#1 kandace

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Posted 12 March 2009 - 11:22 AM

Frugal diners have put Outback Steakhouse at risk of defaulting on its debt.

OSI Restaurant Partners, the homegrown Tampa chain that in two decades grew into one of the nation's most popular and influential restaurant companies, has hired a turnaround specialist help cut costs and boost sales.

The arrival of AlixPartners LLC, a Southfield, Mich., turnaround firm, comes as Moody's Investors Service put the chain's owners on its new "Bottom Rung" list of companies most likely to default on their junk bond debt.

Known euphemistically as the "dead man walking" list in the gallows humour of the distressed bond market, the rating agency estimated 45 percent of the candidates named will default on some part of their debt this year.

Making the list are 283 of the 2,055 companies whose unsecured debt is rated by Moody's, a number that doubled this time thanks to the souring of a private-equity and hedge firm buying binge of the past few years.

Chapter 11 bankruptcy is only one option for the most debt-burdened on the list. A few will work their way out. Many will make stock-for-debt swaps with creditors who risk a worse haircut if they push for a bankruptcy proceeding.


#2 Scaggsville

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Posted 12 March 2009 - 11:23 AM

Cricky!

#3 aped

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Posted 12 March 2009 - 11:27 AM

Frugal diners have put Outback Steakhouse at risk of defaulting on its debt.

OSI Restaurant Partners, the homegrown Tampa chain that in two decades grew into one of the nation's most popular and influential restaurant companies, has hired a turnaround specialist help cut costs and boost sales.

The arrival of AlixPartners LLC, a Southfield, Mich., turnaround firm, comes as Moody's Investors Service put the chain's owners on its new "Bottom Rung" list of companies most likely to default on their junk bond debt.

Known euphemistically as the "dead man walking" list in the gallows humour of the distressed bond market, the rating agency estimated 45 percent of the candidates named will default on some part of their debt this year.

Making the list are 283 of the 2,055 companies whose unsecured debt is rated by Moody's, a number that doubled this time thanks to the souring of a private-equity and hedge firm buying binge of the past few years.

Chapter 11 bankruptcy is only one option for the most debt-burdened on the list. A few will work their way out. Many will make stock-for-debt swaps with creditors who risk a worse haircut if they push for a bankruptcy proceeding.


I'm skeptical about cutting labor costs. Most restaurants pay their waitstaff, bartenders and bus boys minimum wage. The cooking staff may warrant some cost but how much are short order cooks making these days? I guess they'll have to cut managerial salaries.

During the campaign, she proved allergic to briefings and remained determined to stay uncorrupted by knowledge.


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#4 BiggSeth

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Posted 12 March 2009 - 11:33 AM

yet another example of unsustainable growth. How many Outback Steak Houses does one need within a 5 mile radius of their home?

close a few stores, centralize all prep work to a central distrubution commisary, cut corners on quality, cheapen the product and become the next TGI Fridays......;)
The essence of Freedom is the proper limitation of Government.....

#5 HypoxicHobo

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Posted 12 March 2009 - 11:39 AM

Don't know, don't care, lets hope Texas Roadhouse buys the building and reopens them as Roadhouses. :P

UAW jobs are so easy a deserving scab can do it in Mexico. :P

#6 LarryN

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Posted 12 March 2009 - 11:42 AM

Don't know, don't care, lets hope Texas Roadhouse buys the building and reopens them as Roadhouses. :P


Can I hear an AMEN?

AMEN!

#7 SouthSide

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Posted 12 March 2009 - 11:45 AM

Outback is terrible for a "steakhouse".

#8 LarryN

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Posted 12 March 2009 - 11:46 AM

Outback is terrible for a "steakhouse".


And it isn't Australian either

#9 regularguy

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Posted 12 March 2009 - 11:59 AM

Every time I tried going to the Outback at Hunt Valley, it was packed, with a 45 minute wait for a table. I always ended up going to Carraba's next door.

#10 mlatoman

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Posted 12 March 2009 - 12:02 PM

It won't be the same without hearing the "Mum" song around Mother's Day if Outback goes down the crapper.
[SIGPIC][/SIGPIC]"This little piggie should have stayed home

#11 MDvet

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Posted 12 March 2009 - 12:03 PM

Outback in Perryhall is usually packed too.

One Tuesday night, my family had to wait 30 minutes.

#12 kandace

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Posted 12 March 2009 - 12:17 PM

And it isn't Australian either

I was surprised when I discovered that the chain had no link to Australia. In my innocent ignorance, I had always assumed that somehow the founder was an Aussie who had immigrated to the US and set up a chain of restaurants themed according to his homeland. Interestingly, there is an Outback presence in Australia, so the theme restautrant did return to its imaginary roots, so to speak.

#13 Evil Yoda

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Posted 12 March 2009 - 12:29 PM

I'm skeptical about cutting labor costs. Most restaurants pay their waitstaff, bartenders and bus boys minimum wage. The cooking staff may warrant some cost but how much are short order cooks making these days? I guess they'll have to cut managerial salaries.

Actually, most pay less than minimum wage. They're allowed to because a certain income from tips is assumed. This is why many restaurants use "tip pools" which require tips to be placed in a common pool and then shared out to everyone. It's also why, even when I pay for the food with plastic, I leave cash tip. My goal is to reward the server who does a good job. His or her goal (or not) should be to reward the supporting players as he or she feels appropriate. They can do that more easily with a cash tip, I feel. I don't like tip pools because in that scheme the lazy know-nothing bad server does as well as the person who gives me a good recommendation and brings me hot food promptly when the chef finishes with it.
Government ~ Bailouts

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#14 beeg jacques

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Posted 12 March 2009 - 02:04 PM

For the life of me, I can't figure out why people flock to places like Outback, Olive Garden, etc, and willingly wait for an hour to be seated.

The food is mediocre at best.

#15 Sedu

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Posted 12 March 2009 - 03:00 PM

Where will me and my Sheila go for a bloomin' onion?
Are you eyeballing me punk?

#16 MDvet

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Posted 12 March 2009 - 03:11 PM

For the life of me, I can't figure out why people flock to places like Outback, Olive Garden, etc, and willingly wait for an hour to be seated.

The food is mediocre at best.


Do you have better places to eat out - for people who are current on their bills - mortgage, BG&E, and etc.

#17 jthorne

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Posted 12 March 2009 - 03:51 PM

Do you have better places to eat out - for people who are current on their bills - mortgage, BG&E, and etc.

half price burgers at claddaghs on saturday. i swear to GOD they are some of the best burgers i've ever had. a freakin' orgasm for the palate.

#18 aliensquirl

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Posted 16 March 2009 - 10:31 AM

Outback in Perryhall is usually packed too.

One Tuesday night, my family had to wait 30 minutes.


I've been there several times, but not recently. Always had at least a half hour wait. The food quality and service was impeccable even once with a party of twelve.


#19 daravenator

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Posted 16 March 2009 - 10:41 AM

Outback's sister company Carraba's italian restaurant just blows olive garden away. I would take hillside cafe or Culhane's on 83 north below harrisburg over any chain steak house.