- In November 2010, CB Holding shuttered 29 Charlie Brown’s Steakhouse and 18 Bugaboo Creek locations as underperformers in a weak economy, affecting about 1,400 employees.
- The parent filed for Chapter 11 on Nov. 17, 2010 with estimated assets of $100–$500 million and liabilities of $50–$100 million after revenues fell to about $219 million in 2009 from $239.1 million in 2008.
- In 2011 restructuring sales, Praesidian bought the remaining 20 Charlie Brown’s for $9.5 million, Capitol BC bought Bugaboo Creek for about $10.1 million, and Villa Enterprises bought The Office Beer Bar & Grill for $4.7 million.
- The breakup underscores how multi-concept casual-dining chains with high fixed costs can be forced into rapid closures and discounted asset sales during downturns.
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CB Holding’s 2010 collapse represents a case study in how multi-concept casual dining enterprises are vulnerable to a combination of macroeconomic downturns, operational underperformance, and private equity pressures.
First, the large-scale closures indicate severe underperformance, especially across specific geographies. CB Holding closed nearly half its Charlie Brown’s units (29 of 49) and more than half of Bugaboo Creek’s (18 of 30) in just a short span. These predominately impacted New Jersey, New York, Pennsylvania, and the Atlanta and Massachusetts Bugaboo Creek locations. The hard hit in those locales suggests competitive saturation, declining brand appeal, or cost pressures (labor, real estate, food costs), exacerbated by the 2008–2009 economic downturn. CB Holding expressly cited underperforming locations.
Second, although the company was not overtly insolvent in accounting terms (assets still exceeded liabilities), it lacked sufficient liquidity to sustain operations. Its 2009 revenues had already slipped to ~$219 million, down from ~$239 million in 2008. Filing for Chapter 11 came with ~39 locations remaining, which would require careful financial engineering and business model optimization to maintain viability. CB Holding’s attempt at a strategic bankruptcy — closing unprofitable stores, shedding liabilities and planning asset sale — aligns with PE owner strategies to stem losses and preserve residual value.
Third, the asset sales in 2011 illustrate how distressed casual dining chains are sold off at heavily discounted multiples, often to smaller regional operators or restaurant operators already managing multiple brands. The regions these buyers cover (Northeast for Bugaboo, New Jersey/New York/Pennsylvania for Charlie Brown’s) inform location rationales based both on geographic operating footprint and local brand equity. Post-sale, efforts were made to retain brand identity and operating continuity.
Strategic implications include the risk exposure of casual dining brands with large fixed cost footprints during economic contraction, especially those with multiple overlapping concepts. Under PE ownership, margin pressures may accelerate closures. Open questions include whether similar distressed PE-held casual restaurant chains were following comparable patterns, and how customers’ preferences and competitive dynamics (fast casual growth, carryout, lower alcohol consumption) were shifting brand value.
Supporting Notes
- CB Holding closed 29 Charlie Brown’s and 18 Bugaboo Creek restaurants in November 2010, targeting underperforming units across NJ, NY, PA, Atlanta, and Massachusetts.
- Cited employee impact: approximately 1,400 workers were affected by the closures.
- CB Holding filed for Chapter 11 on November 17, 2010; at that time, it operated 20 Charlie Brown’s, 12 Bugaboo Creeks, and 7 Office Beer Bar & Grill locations remaining.
- Reported estimated assets of $100-$500 million and liabilities between $50-$100 million in bankruptcy filings.
- 2009 consolidated revenues were about $219 million, down from $239.1 million in 2008, underscoring declining sales before bankruptcy.
- Sale of Charlie Brown’s remaining 20 units to Praesidian Capital for $9.5 million; Bugaboo Creek units to Capitol BC Restaurants LLC for $10.1 million; The Office Beer Bar & Grill chain sold for $4.7 million.
- Post-sale, all Charlie Brown’s units sold were expected to remain open and operate under the same name; likewise, Bugaboo Creek continued operations in select Northeastern states under new ownership.