The Denny's restaurant in Burnsville has permanently closed after the franchise operator MI5 Inc. abruptly shut several locations in Minnesota and Wisconsin, the company said in notices posted at affected sites.
MI5 Inc. told employees the restaurants closed effective at 7 a.m. and that staff were informed one day earlier their employment would end when the doors shut. The company said it borrowed substantial sums over the past year to maintain operations and preserve jobs. Collection activity by certain lenders sharply reduced revenue and cash, MI5 Inc. said, leaving it unable to meet payroll or buy necessary food and supplies.
The closures affect Denny's locations in Burnsville, North Branch, Maplewood and Roseville in Minnesota, and Hudson in Wisconsin, according to the posted notice. MI5 Inc. said other Denny's restaurants in the Twin Cities are not part of the shutdown because they are operated by different franchisees.
Customers at the Burnsville site found a separate notice thanking guests and employees for their support, hard work and memories, and informing them the location was permanently closed.
Bankruptcy, Employee Claims and Immediate Consequences
MI5 Inc. said it has retained bankruptcy counsel and currently anticipates filing for Chapter 7 liquidation. The company warned it could not guarantee sufficient funds would be available to cover all outstanding and final payroll obligations. MI5 Inc. said it will prepare a complete record of amounts employees have earned but have not been paid.
The notice advised employees to promptly apply for state unemployment benefits. It also said certain qualifying employee wage claims may receive priority under federal bankruptcy law, but the company could not guarantee whether or to what extent those claims would be paid.
MI5 Inc. said employees will receive additional information about the anticipated bankruptcy proceeding after a case is filed, including the bankruptcy court, case number and trustee information. The company framed the shutdown as the result of unsustainable debt and lender collection activity that significantly reduced available cash, preventing responsible continued operation.
