S&P cuts Piccadilly Cafeterias

Standard & Poor's downgraded Piccadilly Cafeterias Inc. including cutting its $71 million 12% notes due 2007 to D from CC.

S&P said the action follows the company's announcement that it filed for Chapter 11 protection in the United States Bankruptcy Court.

Piccadilly experienced prolonged sales declines as it struggled to attract a younger segment of the population, S&P noted. The company's sales were also negatively affected by a reduction in shopping mall traffic related to the general economic downturn. As a result of its poor operating performance, the company's liquidity position deteriorated. Liquidity was also hurt by the company's rising pension funding requirements.

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