Luxury Dining Group, owner of the Fig & Olive chain of high-end restaurants with sites in New York, Washington, D.C., and Los Angeles, filed for bankruptcy protection, blaming employee lawsuits and the pandemic.

Majority owner Guillaume Fonkenell will work with company managers to decide which of the nine restaurants are still viable and could eventually turn a profit, according to court papers filed in New York on Friday. The company faces lawsuits related to a Salmonella outbreak that hit its Washington and Melrose Place locations.

The Chapter 11 cases “were precipitated by certain accumulated losses and a series of employment related litigations, with their situation exacerbated by the Covid-19 crisis, forcing each of the restaurants to temporarily close,” the company said in court papers.

Restaurants across the globe face a reckoning -- sales have plunged while rental costs remain a huge drain. Even before the pandemic crisis upended consumer behavior, the industry was suffering from bloated balance sheets and too much competition. According to consulting firm Aaron Allen & Associates, 10% of all restaurants will disappear and at least 20% will go through a restructuring process.

With time and continued funding from Fonkenell, Fig & Olive can reorganize successfully, Luxury Dining Group said. The company has laid off more than 700 workers and currently has only 34 employees.

Fonkenell has agreed to loan the company enough money to help pay for the reorganization, according to court papers.

“We are evaluating each of the operations on a case by case basis and working with our landlords to preserve as many locations as possible,” the company said in a statement.

The case is F&O Scarsdale, LLC 20-22808, U.S. Bankruptcy Court, Southern District of New York (White Plains)

This article was provided by Bloomberg News.