Rubio's files for bankruptcy, 24 LA locations to close

Rubio's Coastal Grill, known for its beloved fish tacos, announced Wednesday it is filing for Chapter 11 bankruptcy, citing rising costs in the state. 

The restaurant, which started in San Diego, said during a bankruptcy announcement that it has closed 48 "underperforming" California locations, including 24 in the Los Angeles area. 

According to a company statement, the chain "has been negatively affected over the past few years by diminishing in-store traffic attributable to work-from-home practices remaining in place." The company also cited rising food and utility costs, along with "significant increases to the minimum wage in California, (which) put pressure on a number of its locations."

"Making the decision to close a store is never an easy one," the company said in a statement. "While painful, the store closures are a necessary step in our strategic long-term plan to position Rubio's for success for years to come. The closings were brought about by the rising cost of doing business in California."

Rubio's said it is entering into a stalking horse purchase agreement to sell the business to an entity formed and controlled by its existing lender. The sale transaction is expected to be completed within 75 days.

Nicholas Rubin, Rubio's chief restructuring officer, said, "Rubio's Coastal Grill is one of the legendary fast-casual chains with a strong and loyal customer following in its communities. Despite the company's best efforts to right-size the company, the continued challenging economic conditions have negatively impacted its ability to meet the demands of its debt burden. The company believes the best path forward for Rubio's is through a court-supervised sale process that will position the brand for long-term success to grow and flourish."

Another 86 locations in California, Arizona and Nevada will continue normal operations.