A federal judge approved Wednesday the sale of the bankrupt Max & Erma’s casual-dining chain to the parent of the Village Inn and Bakers Square family-dining restaurant brands for $28 million.
The winning bankruptcy auction bid from Denver-based Newport Fidelity Holdings LLC included essentially all assets of Max & Erma’s Restaurants Inc., which filed for Chapter 11 bankruptcy protection last October. Those assets included leases for at least 51 corporate restaurants as well as 26 franchised units and eight area developer agreements, according to court documents.
Max & Erma’s reorganization plan, which was created by the company’s interim management and a committee of unsecured creditors, was approved by Judge M. Bruce McCullough of the U.S. Bankruptcy Court for the Western District of Pennsylvania in Pittsburgh.
Fidelity Newport’s $28 million bid bettered an earlier offer of $26.4 million by Concept Development Partners LLC, which is controlled by CIC II LP of Dallas and CDP Management Partners, based in Malibu, Calif.
Though former Max & Erma’s owner Gary Reinert, in partnership with New York-based Pfife Hudson Group and backed by investment bank Cantor Fitzergerald, reportedly was prepared to make a bid in the $32 million range, his group was not mentioned as a qualified bidder in court documents.
Officials of Fidelity Newport Holdings and its operating company, American Blue Ribbon Holdings LLC, also of Denver, had not replied to requests for comment as of press time. It is unclear whether the new owner plans to relocate Max & Erma’s headquarters or consolidate its restaurant holdings.
Fidelity Newport Holdings and minority partner Newport Global Advisors of Woodlands, Texas, acquired the assets of Village Inn and Bakers Square through its American Blue Ribbon Holding subsidiary for an estimated $55 million. The seller was Vicorp Inc., which filed for bankrupt protection in March 2009. American Blue Ribbon is led by chief executive Hazem Ouf, a restaurant company restructuring veteran.
At the time of Blue Ribbon’s asset-buy from Vicorp, the company became the owner or franchisor of 267 Village Inn and Bakers Square restaurants in 25 states, including 177 corporate locations and 90 franchised units. For the fiscal year ended in March, Village Inn booked sytemwide sales of $316.8 million from 221 restaurants and Bakers Square booked systemwide sales of $78.1 million from 45 locations.
Max & Erma’s estimated systemwide sales totaled $210 million from 98 restaurants in 2009, a 9.7-percent drop from estimated sales of $232.5 million in 2008, when the system totaled 107 restaurants.
Bret Thorn contributed to this report.
Contact Alan Liddle at [email protected].