The Elephant Bar Global Grill/Wok Kitchen casual-dining chain has been acquired out of bankruptcy and will be operated by the parent of the Genghis Grill chain.
Costa Mesa, Calif.-based S.B. Restaurant Co., which operated the 34-year-old Elephant Bar chain, filed for Chapter 11 bankruptcy reorganization in June after closing 16 restaurants. At the time, the company said it was looking for a buyer of the remaining 29 units, according to documents filed with the U.S. Bankruptcy Court in Santa Ana, Calif.
On Aug. 6, Elephant Bar agreed to sell all of its assets to CM7 Capital Partners LLC, an affiliate of the Chalak Mitra Group, avoiding a court-supervised auction.
Terms of the deal, which was scheduled to close on Aug. 29, were not disclosed, but a report in Bloomberg news indicated that the buyer would pay about $1.25 million in cash and assume certain liabilities, including an exit financing credit agreement by lender Cerberus Business Finance LLC for up to $18.3 million to finance operations. Dallas-based Chalak Mitra Group is taking over operation of the Elephant Bar, with Jimmy Salas as incoming chief executive. Salas replaces former Elephant Bar CEO Bob Holden.
“We are excited to bring the Elephant Bar into our corporate portfolio of dynamic brands, and we’re proud that we’re able to retain the team members in the restaurant,” said Salas in a statement. “We’re looking forward to bringing the brand back and returning it to the positive growth trajectory that it was on before.”
Through a spokeswoman, Chalak Mitra declined to comment further on details.
Chalak Mitra is an investment group with a portfolio that includes about 260 restaurants, including about 100 Genghis Grill units, along with the Baker Bros. American Deli, Twin Peaks, Ruby Tequila’s, and a franchise group that operates Taco Bell and KFC units across the Northeast.
In 2000, Elephant Bar was acquired by Saunders Karp & Megrue, which later became KarpReilly, a firm with an active restaurant portfolio that includes Café Rio, Café Zupas, Burger Lounge, Paxti’s Pizza, Sprinkles Cupcakes, The Habit Burger Grill, Z’Tejas Southwestern Grill and Hooters. KarpReilly officials confirmed that it no longer holds a stake in Elephant Bar following the Chalak Mitra acquisition.
According to the bankruptcy filing, S.B. Restaurant Co. recorded revenue of $165.5 million in fiscal 2013, a decrease from $171.4 million the prior year. Same-store sales fell 3.4 percent last year, following a 2-percent decline in 2012. Over the first half of the year, same-store sales dipped 9 percent, largely on falling traffic.
S.B. Restaurant Co. blamed the results on an overleveraged balance sheet and increased competition, combined with declines in traffic and sales as customers cut back after the recession.
Correction: Sept. 4, 2014 An earlier version of this story cited an incorrect report about the casual-dining chain’s ownership. KarpReilly LLC no longer holds a stake in Elephant Bar.