Old Country Buffet down to 1 in Twin Cities; company prepares for third bankruptcy

The smorgasbord of Old Country Buffets is now down to one selection in the Twin Cities: Burnsville.

In concert with another planned bankruptcy filing, the national all-you-can-eat chain as of late last week has served its last scoop of mashed potatoes and extra piece of chicken in Maple Grove and Coon Rapids.

The last OCB standing in the Twin Cities market is in Burnsville.

Also suddenly shuttered in recent days in Minnesota were Old Country Buffets in Rochester and St. Cloud. That leaves two still open in the state outside the metro, in Duluth and Mankato.

The closings come a month after seven other Minnesota Old Country Buffets were shut down as part of national restructuring by OCB's parent company, South Carolina-based Ovation Brands. At the time, Ovation closed 74 underperforming outlets across several brands, or 30 percent of its 243 restaurants nationally. Old Country, founded in Eagan in 1983, is Ovation's largest brand.

The chain, which has been in a long decline, had closed more than 400 stores over the past eight years even before these latest shutdowns.

In a statement Monday afternoon, San Antonio-based Buffets LLC — the current corporate entity overseeing the Old Country brand — said it is "closing certain weaker restaurants" that were experiencing a "precipitous decline in sales."

The company said it has also lined up a multimillion-dollar recapitalization loan ahead of a Chapter 11 filing, which will be its third trip to bankruptcy court. Chapter 11 lets a company keep operating while reorganizing its finances under court supervision.

Buffets filed Chapter 11 in 2008 and again in 2012. When it came out of the second bankruptcy in 2012, Old Country was rechristened Ovation Brands and moved from Eagan to Greer, S.C. Ovation retained a back office in Eagan that employed 125 in 2014. The company has declined to comment on how many workers are left at that office.

Ovation itself was bought in August 2015 by Food Management Partners, a San Antonio-based restaurant company. Now, Food Management Partners essentially says it never got filled in on crucial details before the deal was done.

The new Chapter 11 filing is "prompted by the discovery of liabilities, or alleged liabilities, that we believe were not disclosed in our negotiations," Peter Donbavand, vice president for business development for Food Management Partners/Buffets LLC, said in the company's Monday statement. "Among other matters which we were made known only after the acquisition is a $11.37 million judgment against Buffets LLC."

Last October, U.S. District Judge Scott Skavdahl in Wyoming awarded $11.37 million to a Nebraska couple after the husband, Christopher Gage, got a severe case of salmonella poisoning — including kidney failure — after eating at an Old Country Buffet in Cheyenne in 2010.

Skavdahl entered a default judgment against Ovation after the company failed to respond to the lawsuit in a timely manner. Gage's suit was filed in September 2014, almost a year before Food Management bought Ovation Brands. Ovation's new owner says its old owner never disclosed the suit (though it was a public record).

In November, Ovation Brands asked the court to vacate the $11.37 million judgment, saying it didn't operate the Cheyenne restaurant at the time Gage was sickened; an older affiliate of Old Country Buffet did.

Donbavand, in Monday's statement from Buffets, also said that several large long-term contracts the company has "were only recently determined to be, or alleged to be, in arrears and have had to be addressed in order to continue restaurant operations."

Paul Walsh • 612-673-4482

Mike Hughlett • 612-673-7003