Popular Restaurant, Outback Steakhouse, has Filed for Ch. 11 Bankruptcy Protection

Outback Steakhouse franchisee Out West Restaurant Group filed for Chapter 11 bankruptcy because it was struggling with a heavy debt burden and financial damage it attributed to the COVID-19 pandemic. The company, legally known as Cerca Trova Restaurant Group Holdings and its subsidiaries, operates 61 Outback restaurants in the western United States and filed in Delaware on November 2, 2026. This is not a bankruptcy filing by the entire Outback Steakhouse chain or its parent company, Bloomin’ Brands. In simple terms, the franchisee is using a court-supervised process to address its financial problems while keeping its restaurants running and pursuing a sale.

The operator entered bankruptcy with nearly $320 million in debt, according to Law360’s reporting on the case. The company said its business had been “fatally undermined” by the COVID-19 pandemic, identifying that disruption as a central cause of its troubles. Put plainly, its explanation is that the damage from the pandemic left the business unable to recover financially while carrying its obligations. The available reporting does not provide a complete breakdown of how much each individual expense or business setback contributed to the filing.

The financial trouble did not begin with this week’s bankruptcy announcement. On December 31, 2023, Out West, Bloomin’ Brands, and the franchisee’s lenders reached an agreement covering earlier missed payments. That agreement delayed payments and temporarily held back certain enforcement actions, essentially giving the restaurant operator more breathing room. The subsequent bankruptcy filing shows that those earlier arrangements did not produce a lasting resolution of its financial problems.

The immediate plan is to keep the restaurants operating while seeking a court-approved buyer, rather than simply shutting them all down. Bloomin’ Brands has agreed to an initial purchase price of $26.3 million, subject to adjustments and the assumption of certain obligations, although another bidder could make a better offer. It has also agreed to provide up to $5.5 million in interest-free financing, subject to court approval, to help cover operating expenses and bankruptcy-related costs when operating cash is insufficient. These arrangements are intended to preserve restaurant operations and limit disruption for employees and customers while the sale process moves forward.

Ultimately, this filing is about a particular Outback operator’s pandemic-related financial damage, substantial debt, and unresolved payment difficulties, not the entire restaurant brand going out of business. Chapter 11 gives the franchisee a supervised way to work through those obligations and potentially transfer its restaurants to a new owner. The restaurants are expected to continue operating during the case, but the proposed sale still requires court approval and is not guaranteed to close.