Ruby Tuesday has emerged from bankruptcy “a healthier company,” CEO Shawn Lederman said Wednesday. It’s also significantly smaller.

Ruby Tuesday sought bankruptcy protection on October 7—a move that allowed it to shed liabilities, the company said. This included leases from closed locations burdened by COVID-19. The brand said it would permanently shutter 185 corporate units. When the pandemic hit, Ruby Tuesday was forced to furlough 7,000 employees and trim—to the above figure—its company-run footprint from 421 restaurants to 236.

Today, there are 209 corporate-owned and operated Ruby Tuesday stores across the country. Lederman said it emerges positioned “to be more efficient, competitive, and stable for the future.”

Ruby Tuesday had 724 restaurants in May 2016. It was public for 21 years until NRD Partners purchased it in 2017 and took it private. It was valued at $2.40 per share, or $146 million ($335 million if you include debt), and marked NRD Capital’s largest move to date. At that time, Ruby Tuesday had 541 locations.

According to FoodserviceResults, Ruby Tuesday earned $660 million in sales in 2019, a 9 percent drop from 2018.

The company said Wednesday Chapter 11 allowed it to “reinforce the brand’s commitment to its existing guests.” Meanwhile, it will also continue to develop virtual delivery-only brands “to capitalize on its core strengths and increases off-premises business as part of the company’s long-term growth plan.”

“We want to thank our employees, partners and creditors for helping to ensure our plan of reorganization was successful and we look forward to continuing quality service for our guests and communities for many years to come,” Lederman said.

Ruby Tuesday was advised through its reorganization by Pachulski Stang Ziehl & Jones LLP as legal counsel, CR3 Partners, LLC, as financial advisor, FocalPoint Securities, LLC, as investment banker, and Hilco Real Estate, LLC, as lease restructuring advisor and consultant.

Before filing bankruptcy in October, Ruby Tuesday and secured lenders entered a Restructuring Support Agreement to explore two options—to proceed under ownership of the secured lenders or facilitate a sale of assets. Ruby Tuesday didn’t receive a topping bid, or one sufficient enough to satisfy obligations to its lenders. So it instead pursed a debt/equity swap.

This plan was confirmed in early February after Ruby Tuesday presented an agreement to provide roughly $6 million to unsecured creditors. It had initially received approval to move forward with a sale process in November.

Unsecured creditors were set to receive $3 million in cash, including an initial distribution of $2 million after the effective date of the plan and a second, final distribution of $1 million to be paid no later than March 31, 2022. The group will also receive a $2 million note at a 5 percent interest rate if paid in cash and 33 percent of Ruby Tuesday’s recovery from a credit card processing fee class action lawsuit, which should surpass seven figures.

Ruby Tuesday owed $43 million under its credit facility and about $19 million in unsecured debt at the time of its bankruptcy filing.

The chain previously credited increased competition from fast-food and fast-casual brands for its downturn, along with decreased mall traffic, and the disruption of third-party delivery. COVID provided a swifter level of pressure as the company appreciated 90 percent of its business from dine-in pre-virus.

It’s struggles in recent years forced Ruby Tuesday to move out of compliance with certain financial covenants, leading to the closures of restaurants, the sell and lease-back of units, a decision to reduce corporate overhead by more than 45 percent, and investments in off-premises business. Ruby Tuesday, however, entered default in 2019 and 2020.