Chapter 11 allows for a court-managed restructuring of outstanding debt.  It is not necessarily synonomous with a business closing its doors.

If Saddle Rack has a pending liability claim and possible back taxes owed (as indicated in the Argus article)  filing chapter 11 can be a shrewed way to have that debt relaxed or even completely written off.  The state gets pennies on the dollar, the individual who is suing them will get little or nothing.

POTENTIALLY - the saddle rack stays open the whole time and re-emerges as a new legal entity with no little or no debt.   As a food/beverage/entertainment establishment - there should be little or no consequence to their image in the market.

Wonder what the owners are planning on doing.