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Shells Files For Chapter 11

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By MICHAEL SASSO

The Tampa Tribune

Published: September 4, 2008

TAMPA - Shells Seafood Restaurants Inc., a Tampa-based chain, has filed for Chapter 11 bankruptcy protection in Tampa, according to documents filed Wednesday with the Securities and Exchange Commission.

The brief filing states that Shells will continue to manage its restaurants under the bankruptcy court's jurisdiction. Chapter 11 allows a distressed company to reorganize finances while being protected from creditors.

A woman who answered the phone at Shells headquarters Wednesday said Chief Executive Officer Marc Bernstein was not available for interviews.

Shells has struggled for several years. On Friday, Warren Nelson, the president and chief financial officer, resigned.

The company's stock fell to 4 cents a share Tuesday, down from 7 cents a share, and it fell to a penny a share on the bankruptcy news. Shells lost $667,000 in the second quarter of this year, compared with a loss of $1.2 million in the second quarter of 2007. The company's sales fell 22 percent in the second quarter, dropping to $9 million from $11.5 million during the same quarter a year ago.

According to its Web site, Shells was founded in 1985 in South Tampa by gourmet chef John Christen. At one time, the chain had at least 49 restaurants, 32 of which were in Florida and 17 in the Midwest, according to past news reports. However, the Midwest expansion did not succeed, and the company closed those restaurants and retreated to Florida by 2001.

On Wednesday, the chain listed 22 restaurants across Florida, including seven in Hillsborough and Pinellas counties.

Recently, Bernstein announced new measures to try to improve its financial performance. Last month, it launched a concept in South Florida called Rock Beach Grill inside a former Shells restaurant. In July, it launched a new menu that emphasized lower prices and some nonseafood dishes, such as St. Louis-style ribs and chicken wings.

Reporter Michael Sasso can be reached at (813) 259-7865 or msasso@tampatrib.com.

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