WILMINGTON, Del. — Friendly Ice Cream Corp., the 76- year-old restaurant chain known for its ice cream and burgers, sought bankruptcy protection from creditors Wednesday, four years after being bought by private-equity firm Sun Capital Partners Inc.

The two Friendly’s restaurants in central Maine — on upper Main Street in Waterville and Western Avenue in Augusta — were not included in the company’s list of closures.

The company, which opened at the height of the Great Depression with one shop in Springfield, Mass., plans to sell itself at an auction with a Sun Capital affiliate as the lead bidder, according to papers filed in U.S. Bankruptcy Court in Wilmington.

The sale will “quickly restructure the company” and allow it to “emerge stronger and more competitive,” Friendly said in a statement. Friendly attributed the bankruptcy partly to “the challenges of the current economic downturn,” rising costs for commodities such as cream, and above-market rents.

The company requested court permission to hold a Dec. 1 auction, followed by a Dec. 5 hearing to approve the sale. Under the proposed timeline, all bids must be submitted by Nov. 24. Potential buyers would have to offer at least $122.6 million in cash to qualify for the auction.

The Sun Capital affiliate is bidding about $120 million, including cash to pay secured lenders and an amount for unsecured creditors. Second-lien noteholders, majority-owned by Sun Capital affiliates, will bid debt owed on $267.7 million in notes.

The restaurant company, commonly known as “Friendly’s,” closed 63 sites as part of the filing. Another 424 locations will stay open, Friendly said. The Wilbraham, Mass.- based company has franchising operations and makes ice cream products for supermarkets and retailers throughout the country.

Friendly’s founders sold the company in 1979 to Hershey Foods, which introduced the candymaker’s products into its sundaes as toppings. In 1988, the company was bought by Donald N. Smith, who launched the Cyclone soft-serve dessert and renamed the chain “Friendly’s” in 1989.

The company went public in 1997 at $18 a share and was bought by Sun Capital in 2007 for about $395 million, or $15.50 a share.

The chain joins other restaurants that have filed for bankruptcy in the past three years amid an economic slump, including Perkins & Marie Callender’s, operator of full-service restaurants; Sbarro Inc., operator of more than 1,000 pizza restaurants; and Bennigan’s and Steak & Ale, both owned by Metromedia Restaurant Group.

The Souper Salad and Grandy’s brands, owned by affiliates of Summit Investment Management Inc. and Sun Capital, filed for Chapter 11 in September.

Sun Capital, based in Boca Raton, Fla., owns other restaurant operators including Boston Market, Captain D’s Seafood Kitchen, Fazoli’s Restaurants, Smokey Bones Bar & Fire Grill and Real Mex Restaurants, according to its website. Real Mex and affiliates Chevys, El Torito and Acapulco filed for bankruptcy Tuesday in the Delaware court.

–Kary reported from New York.

 


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