Bar Louie files bankruptcy, reaches deal to sell assets to lenders

By Caroline Salls

Pittsburgh, Jan. 27 – Bar Louie filed Chapter 11 bankruptcy on Monday in the U.S. Bankruptcy Court for the District of Delaware under the name BL Restaurants Holding, LLC after reaching an agreement under which its lenders will act as the stalking horse bidder for the company’s assets and support Bar Louie through a court-supervised sale process, according to a news release.

The sale to the lenders via credit bid of the loan obligations is subject to the receipt of higher and better offers.

If the lenders are not ultimately the winning bidder, Bar Louie will pay them a 3% break-up fee and reimburse up to 1% of their sale-related expenses.

Under Bar Louie’s proposed bid procedures, competing bids are due by 4 p.m. ET on March 18.

An auction will be held on March 20, if necessary, and the company is requesting a March 27 sale hearing.

Bids at auction must be made in minimum increments of $500,000.

The company said it will continue to operate its more than 90 locations across the United States in the normal course of business. In advance of the Chapter 11 filing, Bar Louie said it closed underperforming locations to strengthen its operational and financial position.

In conjunction with the filing, the company has received commitments from its lenders for $22 million in debtor-in-possession financing, which will allow Bar Louie to continue operations, complete the transaction and fund post-bankruptcy operating expenses, including its obligations to employees and suppliers.

The DIP facility will mature on the earliest of July 27, the effective date of a plan of reorganization, the termination declaration date, closing of a sale of all or substantially all of the assets stock of the company and the date all obligations are paid in full in cash.

Interest will accrue at the Prime rate plus 800 basis points or Libor plus 900 bps.

The company is seeking interim access to $8 million of the DIP loan.

“Bar Louie is a profitable business focused on long-term growth with new investors,” chief executive officer Tom Fricke said in the release.

“The sale through Chapter 11 will help us to focus on our profitable core locations and expand in areas that have a proven track record of success.”

The company said it expects to emerge from the Chapter 11 process within 90 days.

According to court documents, Bar Louie has $50 million to $100 million in assets and $100 million to $500 million in debt. As of Monday, the company said its capital structure consists of $87 million in outstanding funded-debt obligations, unsecured trade debt of $8 million, and roughly $6 million in other potential unsecured debt, exclusive of potential lease termination claims.

The company’s largest unsecured creditors are Sysco of Houston, with a $3.05 million trade payable claim; A&Z Auburn Hills LLC of Bloomfield Hills, Mich., with a $2.87 million note claim; and A&Z Novi LLC of Bloomfield Hills, Mich., with a $2.87 million note claim.

Klehr Harrison Harvey Branzburg LLP is representing the company in its Chapter 11 proceedings.

Bar Louie is an Addison Tex.-based gastropub operator. The Chapter 11 case number is 20-10156.

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