Sizzler’s Lack of Creditor Payments Dooms Bid to Discharge Debt

Sizzler USA Inc. lost in its request to wipe out its debts in bankruptcy for now after a judge ruled it first has to complete all planned payments to creditors before a discharge is allowed.

The Mission Viejo, Calif.-based restaurant chain has entered into payment plans with five of its most significant trade creditors, with terms ranging from six to 15 months, Judge M. Elaine Hammond of the U.S. Bankruptcy Court for the Northern District of California said March 19. Sizzler hasn’t completed any of them, she said in an oral ruling.

The company’s Chapter 11 plan, confirmed in January, ...