Perkins & Marie Callender’s Inc. said Friday it expects to emerge from Chapter 11 bankruptcy restructuring in the fourth quarter of this year, under control of debt holders.
The Memphis, Tenn.-based operator and franchisor of about 530 Perkins and Marie Callender’s restaurants, which filed for bankruptcy last month, will see a shift of majority control 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 Perkins & Marie Callender’s after buying it for $245 million in 2005.
The company’s statement said it expects to emerge from its financial restructuring in a significantly strengthened position. In compliance with the proposed plan, Perkins & Marie Callender’s secured noteholders will receive new secured term loans.
In addition, the plan provides that Perkins & Marie Callender’s will obtain exit financing in an amount of up to $35 million to finance its operations after the company exits Chapter 11, which will replace the current $21 million Debtor-in-Possession credit facility.
During its restructuring, Perkins & Marie Callender’s will continue to review its leases and business contracts and identify underperforming restaurant locations. Last month, the company said it would close 65 locations, nearly all of which were shuttered in June.
The proposed plan also states that unsecured noteholders will receive equity in the reorganized company, and the company’s general unsecured creditors will be entitled to elect to receive either cash or equity.
“The filing of the plan and the disclosure statement marks a significant step in our restructuring process and fulfills an important commitment under our Restructuring Support Agreement,” J. Trungale, chief executive of Perkins & Marie Callender’s, said in a statement.
“We look forward to continuing to progress our restructuring process with the support of our secured and unsecured noteholders,” he said.
Contact Alan Snel at [email protected].
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