A U.S. Bankruptcy Court has authorized Perkins & Marie Callender’s Inc. to gain access to $16 million in financing so that the parent of two family-dining chains can remain functional during its Chapter 11 bankruptcy restructuring.
The approval, according to a company statement Wednesday, allows Perkins & Marie Callender’s to access up to $16 million under a new $21 million debtor-in-possession credit facility from Wells Fargo Capital Finance. The company can use the capital to pay vendors, employees and taxes.
The court’s decision to authorize interim financing came a day after Perkins & Marie Callender’s, which oversees about 530 family-dining restaurants, filed for Chapter 11 bankruptcy protection and closed 58 restaurants.
“The authorization granted by the court is an important first step in our restructuring process and will facilitate the smooth functioning of the company as the process advances,” Jay Trungale, Perkins & Marie Callender’s chief executive, said in a statement.
The company said it would continue to honor gift cards, pay employees and honor their primary benefits, and pay post-bankruptcy petition invoices for deliveries and claims of its vendors and suppliers. The Perkins & Marie Callender’s plan of reorganization must be filed by July 14 and the restructuring completed no later than Oct. 21
The bankruptcy restructuring will shift majority control of the restaurant comapany to Wayzata Investment Partners LLC, a Minnesota-based private-equity fund and holder of Perkins & marie Callender’s debt. Castle Harlan Inc., a New York-based private equity firm, previously owned the company after buying it for $245 million in 2005.
In April, Perkins totaled 160 corporate locations in 13 states, and another 314 franchised restaurants in the United States and Canada. The Marie Callender’s chain includes 85 corporate restaurants in nine states and 37 franchised locations in the United States and Mexico.
Attorney Mitchel Perkiel of the Troutman Sanders firm in New York, representing the group of Perkins & Marie Callender’s debtors, told Nation’s Restaurant News he was pleased with the decision rendered by U.S. Bankruptcy Judge Kevin Gross.
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