Outback franchisee filed for bankruptcy. Here's what its workers are still owed.

If you work at one of 61 Outback Steakhouse restaurants in California and four nearby states, your employer filed for bankruptcy on Monday. Here is what that means for the money you have earned and the money you are still owed.

Cerca Trova Restaurant Group, a San Diego franchisee also known as Out West Restaurant Group, filed for Chapter 11 in U.S. Bankruptcy Court in Wilmington, Delaware, the Los Angeles Times reported. It runs Outbacks mostly in California, plus Arizona, Colorado, Nevada and New Mexico, and more than half its employees work in California, according to court documents cited by the Times.

The blame on the menu

The company pointed at food costs, falling customer traffic and labor costs, and singled out California's minimum wage, which is $16.90 an hour this year. That's part of the story. The company's numbers tell the rest: its debt grew from $269 million in late 2020 to $449 million this year, beef costs have climbed as much as 5% a year since 2022, and it was shrinking long before this filing, down from 99 restaurants in 2018. Its restaurants outside California are in the same bankruptcy.

"By 2026, the pressures on the business had converged," Cerca Trova CEO David Goronkin said in a court filing quoted by the Times. "Guest traffic and earnings continued to decline, while food, labor, and other production costs continued to rise."

The franchisee has proposed selling its restaurants to Outback's parent company, Bloomin' Brands, for $26.3 million unless a higher bid comes in. Bloomin' spokesperson Elizabeth Daly told the Times the company is "seeking to support operational continuity," meaning it wants to keep the restaurants running.

Chapter 11 doesn't mean your restaurant closes tomorrow

Chapter 11 is a reorganization. The business keeps operating while a judge oversees how its debts get paid or cut, and here the restaurants may end up with a new owner. Nothing in the filing tells you whether your location or your job survives that, so plan for both outcomes.

The money you already earned

Federal bankruptcy law puts workers near the front of the line. Unpaid wages, salary, commissions, vacation, severance and sick pay earned in the 180 days before the filing get "priority" status, which means they are paid before most other unsecured debts, like money owed to suppliers. The cap is $17,150 per worker under 11 U.S.C. § 507(a)(4), as adjusted in April 2025. Anything above that becomes an ordinary claim, which may be paid only in part, or not at all.

Few hourly restaurant workers are owed anything close to that cap. Your job is to make sure every dollar you are owed is on the books. Save your pay stubs and screenshot your schedule and hours now, while you can still get into the scheduling app, and check the stubs for unpaid hours, missing overtime and accrued vacation. If money is missing, watch for a notice from the bankruptcy court about filing a claim, and file one.

If your location closes or you're let go

California sets tight deadlines for a final paycheck. A worker who is fired or laid off must get all wages, including accrued vacation, immediately at termination, according to the California Labor Commissioner. If you quit with at least 72 hours' notice, you get paid on your last day; without notice, within 72 hours. An employer that willfully pays late can owe a "waiting time" penalty of a day's pay for each day it's late, up to 30 days. How a bankruptcy judge treats those penalties is a separate fight, but the deadlines are your starting point.

If the company offers severance in exchange for signing a release, read it before you sign. If you're 40 or older and laid off as part of a group, federal age-discrimination law gives you at least 45 days to consider the agreement and a written list of the job titles and ages of the people cut and kept, and that list can tell you a lot. Before you sign anything, here's how severance negotiation works.

The judge will decide who owns these restaurants. You decide whether you leave with everything you're owed. Start collecting the paperwork today.

Sources

• SoCal Outback Steakhouse franchisee files for bankruptcy, citing California's labor costs, Los Angeles Times
• 11 U.S.C. § 507, Priorities, Cornell Legal Information Institute
• Paydays, Pay Periods, and the Final Payment of Wages FAQ, California Labor Commissioner's Office
• Laid Off in a Group Layoff? What the 45-Day Disclosure Tells You, severance.law
• How severance negotiation works, severance.law