MEMPHIS, Tenn. – Perkins & Marie Callender’s LLC has filed for Chapter 11 bankruptcy protection, announcing plans to sell its Perkins’ business and a segment of its Foxtail bakery business.

The company filed a series of motions that will allow it to continue paying for goods and services and maintain its usual employee compensation and benefit programs. It also has an agreement with existing lenders to provide debtor-in-possession financing to ensure an efficient bankruptcy process. Perkins & Marie Callender’s said it expects to have enough liquidity to continue operating in the normal course throughout the sale process.

The announcement marks the second Chapter 11 filing for the company in eight years. The family-dining and casual-dining operator emerged from its 2011 restructuring under the control of Wayzata, a private investment firm.

In a court filing on Aug. 5, Jeffrey D. Warne, president and CEO at Perkins & Marie Callender’s, said several factors led to the bankruptcy, including “negative sales in 2017 and 2018,” “an elevated commodity environment” and “increased labor costs and an increasingly tight labor market.” While sales have stabilized, Warne said the challenges faced in 2017 and 2018 led the company to consider restructuring alternatives.

On Aug. 4, the company closed 10 Perkins and 19 Marie Callender’s underperforming locations. All other restaurants will remain open.

“Our intention moving forward is to minimize disruptions and ensure that the sale process is as seamless to our guests, employees and vendors as possible,” Warne said.

The Perkins system consists of 342 Perkins restaurants in 32 states and Canada, including 241 franchised units and 101 company-owned-and-operated locations. The company also has a baked foods and manufacturing division, Foxtail Foods, which manufactures pies, pancake mixes, cookie dough and muffin batter for third-party customers and in-store bakeries. In 2006, the Perkins restaurant and bakery chain combined with Marie Callender’s, which consists of seven company and 21 franchised restaurants. Marie Callender’s also has a national presence through its supermarket frozen entree lines offered by Conagra Brands Inc.