🍔New Chapter 11 Bankruptcy Filing - The Krystal Company🍔

The Krystal Company

January 19, 2020

Georgia-based quick-service restaurant chain, The Krystal Company, which features cheap — some might say “iconic” (read: the company = “some”) — square burgers among other horrendous-for-your-health fare (eggnog shakes, anyone?), filed for bankruptcy in the Northern District of Georgia over the holiday weekend. We’re guessing that most of you snobby coastal elites have likely never heard of Krystal and, well, neither had we to be honest. To our surprise, Krystal is purportedly “the oldest quick-service restaurant chain in the South and the second oldest in the United States, the Krystal brand has a prominent place in the South’s cultural landscape.” You learn something new every day.

The chain operates 182 restaurant locations across nine states; it has approximately 4900 employees; it doesn’t own its real estate; it does have 116 franchisees. It also has over $65mm in debt.

Why the bankruptcy? PETITION readers are very familiar with the trends afflicting quick service restaurants. A number have stumbled into bankruptcy in recent years. To point, the company’s Chief Restructuring Officer also recently worked with Kona Grill and Ignite Restaurant Group. There are plenty of distressed restaurant chains to keep the fee meter running, it seems.

So, what are these trends?

• Shifting consumers tastes and preferences (PETITION Note: people are becoming more health-conscious and a slab of previously-frozen meat stacked between a gnarled bun, diced onions, a pickle and some stadium mustard don’t really pass muster anymore). ✅

• Fast casual and online delivery are crushing quick service chains (PETITION Note: we’re going to have to start referring to “The Chipotle Effect”). ✅

• It is increasingly hard to find and retain qualified employees in the current labor market, as turnover exceeds 200% (PETITION Note: #MAGA!!). ✅

• Commodity costs are rising (PETITION Note: but there’s virtually no inflation folks). ✅

• Unfavorable lease terms. ✅

Facing all of this, the company did what struggling companies tend to do: they hired an expensive consultant. Boston Consulting Group came in and to advise the company with respect to “competitive positioning” and this led to a capital intensive rebuilding project of nine of its locations. Yes, they completely demolished and rebuilt nine locations in ‘18 and ‘19. Ultimately, this led to increased sales at those locations but it clearly couldn’t course correct the entire enterprise.

Consequently, the company breached a financial covenant in Q4 ‘18. It obtained an equity infusion which stopped the bleeding…for like a hot second. The company then defaulted under its credit agreement because it couldn’t obtain a “going concern” qualification for the fiscal year ending December 31, 2018. It has been in forbearance since October. Meanwhile, it has been shedding costs: people have been fired and stores have been closed.

About those stores. The average occupancy cost of the company’s locations is $482k/month. Because of this, the company regularly reviews profitability and recently has turned several of its stores “dark” by ceasing all business there. On day one of its chapter 11 bankruptcy filing, the company filed a motion seeking to reject (i) these “dark” leases (38 of them) as well as (ii) several other locations that franchisees operate under subleases that are not profitable (40 total locations).

So, what now? The papers don’t really say much. Oddly enough, the first day declaration ends with some information about a payment processing data breach and says nothing about DIP financing (there isn’t any) or the direction of the case. In a press release, however, the company says that it intends to use the bankruptcy process to pursue “an orderly sale of its business and assets as a going concern.” Now, in the past, we’ve certainly made fun of debtors who have used their first day papers as de facto marketing materials. Not because it’s stupid: it’s rather smart. It was just also rather blatant and shamelessly spinful. Here, though, Krystal doesn’t even mention anything about a marketing process in its papers or, for that matter, a banker (which happens to be the newly merged Piper Sandler).

These guys are off to a rockin start.

*****

Wells Fargo Bank NA ($WFC), the agent under the company’s secured loan, agrees. It filed an objection to the company’s motion seeking authorization to use cash collateral. They wrote:

As the Debtors’ largest stakeholder, the Agent is extremely concerned with the manner in which the Debtors are positioning these cases. The Debtors have yet to file their budget for either the interim period until the second interim hearing or a longer-term budget, but based on the draft budgets that were provided to the Agent prior to filing, it appears that operating on cash collateral alone will not provide the Debtors with sufficient liquidity to make it through a sale process and affords almost no margin for error. The Bankruptcy Code does not permit the Debtors to avoid their obligation to provide adequate protection to the Prepetition Secured Parties on the basis that the Debtors elected a budget that will not permit it. Were the Debtors to run out of cash during the sale process, as they are likely to do, the attendant disruption could jeopardize the entire going concern value of the business and the sale process.

Nothing like a contested cash collateral hearing to get things off on the right foot.

• Jurisdiction: N.D. of Georgia (Judge Hagenau)

• Capital Structure: $10mm RCF, $54.1mm Term Loan (Wells Fargo Bank NA), $1.5mm promissory note (KRY LLC).

• Professionals:

  • Legal: King & Spalding LLP (Sarah Borders, Jeffrey Dutson, Leia Clement Shermohammed)

  • Financial Advisor/CRO: Alvarez & Marsal North America LLC (Jonathan Tibus)

  • Investment Banker: Piper Jaffray & Co. (aka Piper Sandler)

  • Claims Agent: KCC (*click on the link above for free docket access)

• Other Parties in Interest:

  • Wells Fargo Bank NA

    • Legal: Morgan Lewis & Bockius LLP (Jennifer Feldshur, Charlie Liu) & Parker Hudson Rainer & Dobbs LLP (C. Edward Dobbs, Rufus Dorsey, Michael Sullivan)
      

⛽️New Chapter 11 Bankruptcy Filing - Fairway Energy LP⛽️

Fairway Energy LP

November 26, 2018

Belligerent week for companies attached to the oil and gas space (see also Waypoint Leasing). Here, Houston-based Fairway Energy LP, which, interestingly (and somewhat oddly), is 28%-owned by the President and Fellows of Harvard College (🤔), is a storage provider for third-party companies engaged in the production, distribution and marketing of crude oil; it is also now in bankruptcy down in the District of Delaware.

Specifically, the company provides undersurface salt cavern storage, storage that has been utilized since the 40s because of its “extremely low risk of leakage through self-sealing under cavern operating pressures.” The company began construction on its 10-million barrel underground storage facility (the “Facility”) in 2015 (rough timing); yet, it has exclusive rights to store in the facility and has otherwise secured the necessary leases to operate in its geographic location. It is also connected to customers via owned and third-party pipeline systems, which enable to the company to take inbound capacity from the (hot) Permian Basin, the Eagle Ford Shale Basin, and Canada/Midcontinent. The pipelines also connect to hubs that connect to “downstream” infrastructure, i.e., refiners, etc.

To get off the ground, the company had a $390mm equity infusion and $80mm in term loans from Riverstone Credit Partners LP. The company has been operating off of credit agreement amendments now for months, however, given operational and market issues that impeded their use of the Facility and hampered liquidity. Per the company:

For the nine (9) months ended September 30, 2018, Fairway had an operating loss of $38,600,000 (before interest, expense, and other income). Fairway’s financial performance has been negatively affected by (i) reduced and delayed demand for its services, (ii) cost overruns on the Facility, (iii) commercial restrictions on accessing the Facility by existing pipeline connections, and (iv) general market conditions that undermine the demand for crude oil storage.

In other words, a perfect storm posing all sorts of headwinds. These winds, it seems, chilled any potential buyer interest in the Facility: pre-petition efforts to find a buyer, including a stalking horse buyer, proved futile. It seems all of the hopeful and flowery language deployed by the company’s professionals in the First Day Declaration about the usefulness of the Facility isn’t a sentiment shared by any prospective purchasers. Was this whole project a solution in search of a problem? Via the bankruptcy sale process, we’ll soon find out. So, will Riverstone (which is also providing a $20mm DIP credit facility) and the writers of the $390mm of equity checks (read: Harvard).

• Jurisdiction: D. of Delaware

• Capital Structure: $94mm debt     

• Company Professionals:

  • Legal: Haynes and Boone LLP (Patrick Hughes, Martha Wyrick, Kelsey Zottnick) & (local) Young Conaway Stargatt & Taylor LLP (Edmon Morton, Kenneth Enos, Elizabeth Justison)

  • Financial Advisor: Alvarez & Marsal North America LLC (Gary Barton, Kevin Larin)

  • Investment Banker: Piper Jaffray & Co./Simmons & Company International

  • Claims Agent: Prime Clerk LLC (*click on company name above for free docket access)

• Other Parties in Interest:

  • Administrative Agent under Secured Term Loan Credit Agreement & DIP Lender/Agent: Riverstone Credit Partners LP

    • Legal: White & Case LLP (David Turetsky, Andrew Zatz) & (local) Fox Rothschild LLP (Jeffrey Schlerf)

New Chapter 11 Bankruptcy Filing - Egalet Corporation

Egalet Corporation

October 30, 2018

Pennsylvania-based publicly-traded specialty pharma company, Egalet Corporation ($EGLT), filed for chapter 11 bankruptcy in the District of Delaware — the latest in a mini-trend of specialty pharma companies to work their way into bankruptcy court (i.e., Orexigen Therapeutics Inc., Bind Therapeutics, Concordia).

The company intends to use the bankruptcy process to effectuate an acquisition of the assets of Iroko Pharmaceuticals Inc., a privately-held specialty pharma company focused on pain management therapies. The company and Iroko will enter into an asset purchase agreement in connection with and as part of a plan of reorganization, and Iroko will obtain 49% of the outstanding stock of the reorganized Egalet and $45mm of new senior secured notes. The acquisition will fortify the reorganized Egalet’s product-candidate lineup which already includes one anti-inflammatory nasal spray and one oral oxycodone formulation. This proposal is also supported by various holders of the company’s debt in the form of a restructuring support agreement.

But why is this company bankrupt in the first place? First, $128.6mm of debt taken on to fund (i) the development of commercial operations relating to the company’s approved products and (ii) R&D costs relating to product candidates. Also:

For the years ended December 31, 2017, 2016 and 2015, the Debtors reported net losses of approximately $69.4 million, $90.6 million and $57.9 million, respectively. These losses were a result of the Debtors’ continued investments in their commercialization capabilities, the Debtors’ research and development activities, the Debtors’ increasing debt service obligations and general difficulties in increasing the revenue generated from the Debtors’ marketed products, including challenges specific to the abuse-deterrent market such as shifting legislative and social responses to the opioid epidemic.

On account of all of this, the company got a Nasdaq delisting which triggered a “fundamental change” under the company’s converts which required the company to buy back its converts. Of course, the company didn’t have the ability to do so under its credit docs. Ruh roh. Enter restructuring professionals here.

The reorganized debtors will continue to operate under the Egalet name and will be positioned, post-acquisition, to market six commercial products. The company intends to use cash collateral to finance the cases and be out of bankruptcy within 95 days.

Among the companies largest shareholders are Highbridge Capital Management LLC, Broadfin Capital LLC, Deerfield Management Company LP, and Franklin Advisors Inc.

• Jurisdiction: D. of Delaware

• Capital Structure: $128.6mm debt (see below)

• Company Professionals:

  • Legal: Dechert LLP (Michael Sage, Brian Greer, Stephen Wolpert, Alaina Heine) & (local) Young Conaway Stargatt & Taylor LLP (Robert Brady, Sean Greecher)

  • Financial Advisor: Berkeley Research Group LLC

  • Investment Banker: Piper Jaffray & Co.

  • Claims Agent: KCC (*click on company name above for free docket access)

• Other Parties in Interest:

  • Ad Hoc Secured Noteholder Committee

    • Legal: Paul Weiss Rifkind Wharton & Garrison LLP (Andrew Rosenberg, Jacob Adlerstein, Adam Denhoff, Michael Turkel, Miriam Levi) & (local) Cozen O’Connor (Mark Felger, Simon Fraser)

  • Ad hoc committee of holders of the 5.50% Convertible Notes due 2020 and 6.50% Convertible Notes due 2024

    • Legal: Akin Gump Strauss Hauer & Feld LLP (Michael Byun, Erik Preis, Stephen Kuhn, Erica McGrady) & (local) Ashby & Geddes PA (Karen Skomorucha Owens)

  • Iroko Pharmaceuticals LLC

    • Legal: Baker & McKenzie LLP (Debra Dandeneau, Frank Grese III) & (local) Whiteford Taylor & Preston LLC (L. Katherine Good, Aaron Stulman)

Source: First Day Declaration

🌮New Chapter 11 Filing - RM Holdco LLC (Real Mex)🌮

RM Holdco LLC

8/5/18

In April's piece entitled "🍟Casual Dining is a Hot Mess🍟" and then in a follow-up in July creatively and originally entitled "🍟Casual Dining Continues to = a Hot Mess🍟" we noted that...well...casual dining is a hot mess. As of today…A. Spicy. Hot. Mess. Actually.

Late last night, RM Holdco LLC, the owner of a portfolio of 69 company-operated and 11 franchised restaurants and contemporary taquerías including Chevy's Fresh Mex, Siniqual, El Torito Grill, Las Brisas and Alcapulco filed for bankruptcy to effectuate a "363 sale" of substantially all of its assets to an affiliate of one of its pre-petition equityholders, Z Capital Partners LLC for $46.75mm. Interestingly, this filing also marks the third — that’s right, THIRD — chapter 22 filing in the last week following Home Heritage Group Inc. and Brookstone Inc. This is how we previously described a “Chapter 22”:

For the uninitiated, Chapter 22 in bankruptcy doesn’t actually exist. It is a somewhat snarky term to describe companies that have round-tripped back into chapter 11 after a previous stint in bankruptcy court.

Real Mex previously filed for bankruptcy in October 2011 and sold to Z Capital and Tennenbaum Capital Partners LLC in March 2012. At the time of that previous chapter 11 filing, the company operated approximately 128 restaurants.

This time, the signs of an imminent bankruptcy filing were out there shining for all to see as the company has been sending smoke signals for months. Back in May, Bloombergreported that the company hired Piper Jaffray to pursue a sale — including one that could be consummated in bankruptcy. Thereafter, in June, the company filed a WARN Notice with the Department of Labor indicating that it intends to close its Times Square location and lay off 134 employees. Perhaps the signs were in place even earlier when the company hired the former CFO of Wet Seal, a retailer that, itself, found its way into bankruptcy court twice.

The company highlights various macro factors as reasons for this chapter 11 filing:

For the past six (6) years, the Debtors have struggled with certain industry-wide and company-specific pressures that have negatively impacted their operations. Trends in the greater restaurant industry, including increases to minimum wage and commodity costs, have created substantial pressure on the entire sector, as evidenced by the numerous brands that have filed for bankruptcy in recent years, including Ignite Restaurant Group (Brick House and Joe’s Crab Shack), Macaroni Grill, Garden Fresh, Bertucci’s, Crumbs, Cosi, and Buffets.

And:

In addition, increased competition, especially in the form of available, quality Mexican fast casual options, has had a significant impact on traffic in the Debtors’ restaurants.

For anyone keeping track of the “What Caused Bankruptcy” standings, this would be Amazon Inc. ($AMZN) 282,499,209 and (now) Chipotle Inc. ($CMG) 1.

Compounding matters here is (i) the company’s $200+ million in debt, (ii) an expensive workers’ compensation program, (iii) long-term lease burden (it leases all of its locations, the majority if which are in California), (iv) an expensive-yet-unconsummated-growth-strategy (the company attempted but failed to pursue expensive M&A processes with bankrupted Garden Fresh Restaurant Intermediate Holdings, among others), and (v) poor risk management procedures. On the latter point, it seems the company was a wee bit cavalier about not-at-all-serious matters like alcohol awareness, sexual harassment and food handling safety; therefore, it “experienced higher-than-normal litigation and enforcement-related expenses.” Yikes.

Now, back in October 2016 — in the context of Garden Fresh’s chapter 11 filing — we asked “Are Progressives Bankrupting Restaurants?” Therein we highlighted the following:

…Morberg's explanation for the bankruptcy went a step farther. He noted that cash flow pressures also came from increased workers' compensation costs, annual rent increases, minimum wage increases in the markets they serve, and higher health benefit costs -- a damning assessment of popular progressive initiatives making the rounds this campaign season. And certainly not a minor statement to make in a sworn declaration.  

It's unlikely that this is the last restaurant bankruptcy in the near term. Will the next one also delineate progressive policies as a root cause? It seems likely.

Points for PETITION’s bullseye?

Notably, here, the company also underscores that employee costs were a significant contributor to its liquidity constraints. It states:

While struggling with the specific issues discussed above, the Debtors have also suffered from rising employee wage costs, which are particularly high in California, where the vast majority of the Debtors’ restaurants are located. In an attempt to minimize these costs, the Debtors have implemented a scheduling program that has reduced employee hours and has optimized both front-of-house and back-of-house staffing.

Welcome to the party, Mr. Unintended Consequences.

The company seeks to use the bankruptcy process to effectuate the afore-mentioned sale to Z Capital. While the purchase price is a mere fraction of the debt on balance sheet, Z Capital’s proposed stalking horse asset purchase agreement also provides that it will “offer employment to all Company employees at purchased restaurants who are employed at the closing, and may offer employment to other Company employees as well.” In other words, this may be one of those instances where the funds lose on their investments but the (remaining) employees come out relatively okay. Z Capital and Tennenbaum are also providing the company with a $5.5mm DIP credit facility to finance operations during course of the cases.

• Jurisdiction: D. of Delaware (Judge [ ])

• Capital Structure: $41.7mm first lien credit facility (Wells Fargo Bank NA), $195.1mm second lien credit facility (Wells Fargo Bank NA), $17.53mm in secured reimbursement obligation loans (from Letters of Credit), $53.62mm unsecured subordinated convertible debt (Z Capital = large holder)    

• Company Professionals:

  • Legal: Sidley Austin LLP (Vijay Sekhon, Christina Craige, Ariella Thal Simonds) & (local) Young Conaway Stargatt & Taylor LLP (Robert Brady, Elizabeth Justison, Andrew Magaziner, Edmon Morton, Michael Nestor)

  • Financial Advisor: Alvarez & Marsal LLC (Jonathan Tibus)

  • Investment Banker: Piper Jaffray & Co. (Jean Hosty, Terri Stratton, Michael Sutter) 

  • Claims Agent: KCC (*click on company name above for free docket access)

• Other Parties in Interest:

  • Stalking Horse Bidder & DIP Lender: Z Capital Group LLC (Legal: Cleary Gottlieb Steen & Hamilton LLP & (local) Morris Nichols Arsht & Tunnell LLP)

  • DIP Lender: Tennenbaum Capital Partners (Legal: Schulte Roth & Zabel LLP & (local) Landis Rath & Cobb LLP)

  • DIP Agent: Wells Fargo Bank NA (Thompson & Hine LLP)

Chapter 11 Bankruptcy Filing - Aerosoles International Inc.

Aerosoles International Inc.

• 9/15/17 Recap: Remember that once-popular trope that footwear was impervious to Amazon and e-commerce? People want to go to stores to try on shoes, we've been told. Lost in that, however, is that free returns make it THAT much easier to try/err with sizing via delivery. And, so, not-so-shockingly, another private equity (Palladin Partners LP) owned specialty retailer is in bankruptcy court. The New Jersey based company has "approximately 78 stores" (PETITION Note: how does it not know the exact number?) in the United States that cater towards providing women with "feel good" footwear. The stores are located in malls, lifestyle centers, street locations and outlet centers. This 78-count footprint is down dramatically: the company has already reduced its store count by over 30 stores in the last year or so. The company also generates revenue through its (i) direct e-commerce business (which, seemingly, is fairly well built out with 1.4mm visitors a month...note, pretty good sales right now!), (ii) wholesale business, (iii) "first cost business" (which sounds like a middleman situation where the company aids other companies in the design and production of their own separately branded footwear, and (iv) international licensing. The company blames a highly competitive women's footwear market, a large sourcing disruption (to the tune of $4mm of lost EBITDA), shifting trends from bricks to clicks and other operationally-specific reasons for the chapter 11 filing. Like what? Glad you asked. First, the company had a hard time servicing its debt while also making the significant cash outlays needed to inventory-up for the critical spring and fall seasons. Second, the company - in a showing of REALLY FRIKKEN HORRIBLE TIMING - expanded its retail store footprint considerably in 2012 and 2013, subjecting itself to onerous leases in the process. Third, the company lost its Asian sourcing agent in spring 2016 and has subsequently had difficulty restoring lost customer confidence and maintaining order load. MAGA! And so now what? Ready for this shocker? The company intends to refocus its efforts towards the non-brick-and-mortar aspects of its business. Remember those "approximately 78" stores we noted above? Well, the company is saying "PEACE" to 74 of them in bankruptcy. Finally, the company intends to use the bankruptcy process to find a buyer for the company (and its new business plan). 
• Jurisdiction: D. of Delaware 
• Capital Structure: $72.3mm of total debt. $22.9mm ABL (Wells Fargo Bank NA), $19.7mm TL (THL Corporate Finance Inc.), $19.1mm senior notes, $8.9mm sub notes, and $1.7mm sub loan. 
• Company Professionals:
  • Legal: Ropes & Gray LLP (Gregg Galardi, Mark Somerstein, William Alex McGee) & Bayard PA (Scott Cousins, Erin Fay, Gregory Flasser)
  • Financial Advisor: Berkeley Research Group LLC (Mark Weinsten)
  • Investment Banker: Piper Jaffray & Co.
  • Liquidation Agent: Hilco Merchant Resources LLC 
  • Claims Agent: Prime Clerk LLC (*click on company name above for free docket access)
• Other Parties in Interest:
  • ABL Agent: Wells Fargo Bank NA
    • Legal: Choate Hall & Stewart LLP (Kevin Simard, Jonathan Marshall) & (local) Womble Carlyle Sandridge & Rice LLP (Mark Desgrosseilliers, Matthew Ward)
  • TL Agent: THL Corporate Finance Inc.
    • Legal: Paul Hastings LLP (Matthew Murphy) & Young Conaway Stargatt & Taylor LLP (M. Blake Cleary)
  • Prepetition Senior Noteholders & Subordinated Noteholders (ORIX Funds Corp., Palladin Partners LP)
    • Legal: Weil Gotshal & Manges LLP (Jacqueline Marcus) & (local) Richards Layton & Finger PA (Mark Collins, Paul Heath, Joseph Barsalona II)
  • Official Committee of Unsecured Creditors (ICB Asia Co. Ltd., Rival Shoe Design Ltd., Moveon Componentes E Calcado SA, Simon Property Group, GGP Limited Partnership)
    • Legal: Cooley LLP (Michael Klein, Sarah Carnes) & (local) Gellert Scali Busenkell & Brown LLC (Michael Busenkell, Ronald Gellert, Shannon Dougherty Humiston)

Updated 10/5/17 11:17 am CT 

New Chapter 11 Filing - Portrait Innovations Inc.

Portrait Innovations Inc.

• 9/1/17 Recap: Remember professional portrait studios? Yeah, we don't either. Mostly because we haven't stepped foot in a mixed-use commercial location or traditional retail park since we got linked up to the internet 20 years ago. And that is predominantly where you'd find a Portrait Innovations studio: there are 119 of them in 31 states (including 3 studios in Walmart Supercenters). You know the story by now: with a significant decline of brick-and-mortar retail visitors comes decreased revenue...blah blah blah, bankruptcy. Here, management attempted to stave off the inevitable by negotiating rent forgiveness, closing underperforming locations (63, to be exact), and pursuing the positive, i.e., more Walmart studios. In the absence of flex by the landlords, management lacked the capital, however, to accomplish these goals. The bankruptcy filing is meant to effectuate a sale of the equity to a buyer and further reconcile leases. The company has secured a stalking horse bid from prepetition creditor, CapitalSouth Partners, and a $5mm DIP credit facility to fund the cases. 
• Jurisdiction: W.D. of North Carolina (Judge Whitley)
• Capital Structure: $15mm senior secured debt (CapitalSouth Partners SBIC Fund III LP)     
• Company Professionals:
  • Legal: Rayburn Cooper & Durham PA (John Miller Jr., Paul Baynard, Benjamin Shook)
  • Investment Banker: Piper Jaffray & Co.
  • Real Estate Advisor: Hilco Real Estate LLC
  • Claims Agent: Rust Consulting/Omni Bankruptcy (*click on company name above for free docket access)
• Other Parties in Interest:
  • Secured Creditor/DIP Lender/Bidder: CapitalSouth Partners SBIC Fund III LP
    • Legal: K&L Gates LLP (Charles A. Dale III, Aaron Rothman, Margaret Westbrook)

Updated 9/18/17 5:15 pm CT

New Chapter 11 Filing - Ignite Restaurant Group

Ignite Restaurant Group

• 6/6/17 Recap: Publicly-traded ($IRG) Houston-based owner of 112 Joe's Crab Shack locations and 25 Brick House Tavern + Tap locations filed for bankruptcy because people can't tear their eyes off of whatever mobile device they're towing around long enough to sit at a casual dining spot. "The market for casual dining has been deteriorating for some time." No kidding, dudes. That said, someone clearly still believes in the space as the company has lined up a stalking horse bidder to purchase the company in bankruptcy for $50mm and some assumed liabilities (subject to deductions/increases). That "someone" is KRG Acquisitions Co LLC, an affiliate of Kelly Investment Group. Maybe it's the "'I'm relaxed' restaurant experience" that the buyer finds compelling...? (Serious question: is weed legal in Texas yet?). Anyway, good luck with that. 
• Jurisdiction: S.D. of Texas
• Capital Structure: $30mm RCF & $165mm TL (Credit Suisse AG)     
• Company Professionals:
  • Legal: King & Spalding LLP (Sarah Borders, Jeffrey Dutson, Edward Ripley, Elizabeth Dechant)
  • Financial Advisor: Alvarez & Marsal LLC (John Tibus)
  • Investment Banker: Piper Jaffray & Co. (Richard Shinder, Teri Stratton)
  • Real Estate Advisor: Hilco Real Estate LLC 
  • Claims Agent: Garden City Group LLC (*click on company name above for the free docket)
  • Other Parties in Interest:
    • Credit Suisse AG
      • Legal: Latham & Watkins LLP (Keith Simon, David Hammerman, Hugh Murtagh) & (local) Porter Hedges LLP (John Higgins)
    • KRG Acquisition Co LLC 
      • Legal: Goldberg Kohn Ltd. (Randall Klein, Prisca Kim) & (local) Okin Adams LLP (Matthew Okin, Ryan O'Connor)
    • Official Committee of Unsecured Creditors
      • Legal: Pachulski Stang Ziehl & Jones LLP (Jeffrey Pomerantz, Bradford Sandler) & (local) Cole Schotz PC (Michael Warner)
    • Potential Buyer: Landry's Inc.
      • Legal: Haynes and Boone LLP (Patrick Hughes, Arsalan Muhammad, Jonathan Pressment, Sarah Jacobson)

Updated 7/17/17 11:23 am CT