Photo: KEVIN GEIL, EMPLOYEES / SAN ANTONIO EXPRESS-NEWS
Houlihan's Restaurants Inc. may become the latest chain of restaurants that billionaire Tilman Fertitta has brought out of bankruptcy
along with more than 30 affiliated Companies. But Landry's, the Houston-based restaurant group that runs Joe's Crab Shack, Rainforest Cafe, and Morton's steakhouses, has already offered to pay $ 40 million for the business and take on certain liabilities, court records show. Houlihan has reported assets of approximately $ 80 million and liabilities of approximately $ 77 million.
With a submission in Chapter 11, Houlihan can keep its doors open and employ 3,450 people while a rehabilitation plan or sale is being prepared. Landry's offer is a so-called stalking horse bid, which sets a lower limit for all other offers that arise in a bankruptcy sale process.
Landry intends to offer employment to "many" of its current employees, as court documents show. Lenders, including CIT Bank, agreed to provide $ 5 million to fund bankruptcy.
"We expect the process to run smoothly for our guests, team members, and salespeople," said Houlihans chief executive officer Mike Archer in a statement.Houlihan's expects that The sale will be completed by the end of this year.
Houlihan's was founded in 1992 and is headquartered in Leawood, Kansas .The company operates 47 restaurants in 14 states, including J. Gilbert's, Bristol Seafood Grill and Devon Seafood Grill and 23 franchisees that were not included in the filing.
Houlihan's is currently owned by York Capital Management, which made the company about three years ago with the help of a secured line of credit totaling more Bought $ 50 Million
Changes in the Management, unfavorable leases and the rapid growth of expensive third-party delivery services, said Chief Manning Officer Matthew Manning in a court settlement. A buy-out of the largest franchisee in May 2018 at an unfavorable time put additional pressure on him.
"Houlihan, unlike Chili's and Fridays and Applebee's is involved in the crisis of casual eating," said Darren Tristano, CEO of Foodservice Results. a restaurant consultation. "For over 10 years, these concepts no longer differ. Your menus seem very similar. "
The company has not paid any interest to the holders of its loans since December last year and closed in advance of Chapter 11 twelve losing locations after it had failed to get concessions from landlords, Manning said. A representative of York Capital did not respond immediately to a request for comment.
Traditional seating restaurants have come under pressure as consumers increasingly opt for fast-casual options. Rising minimum wage thresholds also do not help, as Restaurants Unlimited Inc. blames such increases in part for bankruptcy in July. Landry, along with Joe's Crab Shack and a Western-themed chain called Claim Jumper, has bought up the bankruptcy of the West Coast chain after seeking legal protection.
"They're looking for value," said Tristano. "They're looking for restaurants that need capital urgently, they're trying to stop the bleeding and waiting for the restaurants, and economies of scale can cut costs."
The company generated $ 202 million in revenue in fiscal year 2019 Ping Jaffray & Co. was hired in June to wind up the sales process, according to Manning, earning about $ 9 million in earnings before interest, taxes, depreciation and amortization.