• Enabled effective cash management
  • Navigated environment during bankruptcy
  • Effectuated comprehensive Plan of Reorganization 

The company was a $300MM private equity-owned casual dining restaurant that experienced sales declines due to industry trends and the COVID-19 pandemic, forcing the company to file for Chapter 11 bankruptcy to reorganize. CR3 Partners was retained by the company as financial advisor to assist in bankruptcy filing preparation, liquidity management, negotiation, and operational analysis. CR3 was able to navigate through a contentious environment during the proceeding and successfully emerge from bankruptcy through a Plan of Reorganization that incorporated a debt-to-equity conversion, footprint rationalization, and reduction in other liabilities.

The Situation

  • $300MM private equity-owned casual dining restaurant chain with 6,000 employees
  • Prior to COVID-19, casual dining industry was trending downward, resulting in company downsizing its locations by more than half and incurring significant landlord lease rejection damages
  • COVID-19 exacerbated distress in the casual dining industry, resulting in a significant sales decline and forcing company to file for Chapter 11 bankruptcy to reorganize

The Work

  • CR3 Partners was retained by company as financial advisor to assist in bankruptcy filing preparation, liquidity management, DIP negotiation, and financial and operational analysis such as four-wall EBITDA
  • Worked with executive team on managing liquidity and DIP covenant requirements, handling inquiries from various parties during bankruptcy proceeding, and assisting in financial projections and liquidation analyses related to development of Disclosure Statement and Plan of Reorganization
  • Coordinated with lenders and Unsecured Creditors Committee’s representatives to communicate and negotiate issues during preparation of filing and bankruptcy proceeding

The Results

  • Enabled company to manage cash and control disbursements more effectively
  • Navigated through contentious environment during bankruptcy proceeding
  • Emerged from bankruptcy through Plan of Reorganization that incorporated a debt-to-equity conversion, footprint rationalization, and reduction in other liabilities

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