BurgerFi International, parent company of Anthony's Coal Fired Pizza and BurgerFi, has been court approved to receive immediate access to $3.5 million in financing to ensure the uninterrupted operations of its 144 locations as it navigates through a Chapter 11 bankruptcy process.
The funding is provided by TREW Capital Management, which owns much of BurgerFi’s debt and which also provided the company with $2.5 million in emergency funding in mid-August, prior to its Chapter 11 filing, which came last week.
The court also approved the use of the company's existing employee benefits, cash management systems, and customer programs. With the debtor-in-possession financing approved by the court, the company has the liquidity to stabilize its operations and work with its vendors and landlords to continue operating to its standards, it noted in a release.
"The company has worked very hard to ensure that the transition into Chapter 11 would have no impact on our valued employees, customers and franchise partners," BurgerFi chief executive officer Carl Bachmann said in a statement. "We are very pleased that we received approval of our key motions to support our continued operations including employee wages and benefits, cash management and customer programs."
As part of the financing agreement, the company will prepare for a sale, with court documents indicating stalking horse bidder interest.
BurgerFi strived to settle its credit obligations as early as May, when the company announced it was considering “strategic alternatives” and entered into a forbearance agreement with existing creditors extending to July 31. Its financial struggles, however, began to manifest well before this year. Following the acquisition of Anthony’s Coal Fired Pizza in Oct. 2021, sales stagnated rather than grew and have been on a downward trajectory since their peak in 2021. According to recent Technomic data, BurgerFi’s sales were down 7.5% from 2022 to 2023, and its unit counts were also down 5.3% year-over-year, with a closure of six underperforming stores.
Earlier this year, the company underwent a CEO change, with former Smashburger president Bachmann taking over as head of the company. Following his appointment in an interview with NRN, Bachmann admitted that the company had “lost its way,” and his goal was to improve both brands’ products and menu innovation.
Also announced Tuesday, David Heidecorn served notice to the board of directors of his resignation as an independent member and as chairman, effective immediately.
Contact Alicia Kelso at [email protected]
