Published: Tue, April 17, 2018
Business | By Tara Barton

Bertucci's restaurant chain files for Chapter 11 with potential buyer identified

Bertucci's restaurant chain files for Chapter 11 with potential buyer identified

As of now, Bertucci's says that it has 59 remaining operating locations and they are still open, but the company faces the real possibility of going out of business without a speedy bankruptcy sale.

Bertucci's is headquartered in Boston and operates restaurants in an area extending from New Hampshire to Virginia. It owes about $110 million to lenders, and about $9 million to suppliers, landlords and other unsecured creditors, the company said in the court papers filed in Wilmington, Delaware.

According to court records, as of the Petition Date, the Debtors were parties to three secured credit agreements, including a Credit Agreement dated September 30, 2015, with CIT Bank and Wells Fargo Bank, N.A. The Senior Credit Agreement provides for an initial term loan commitment of $32.5 million and a revolving credit commitment of up to $5 million.

"Consumers have more options than ever for spending discretionary income, and their preferences continue to shift towards cheaper, faster alternatives", the company added. "Since 2011, Bertucci's has experienced a year-over-year decline in sales and revenue". Bertucci's is considering selling its assets to Right Lane Dough Acquisitions LLC, which hopes to continue the company's business.

The deal with Right Lane was reported at $20 million, according to a Wall Street Journal report. Under the proposed sale, the new owner would take on all of the company's 4,200 employees.

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Bertucci's financial woes are reflective of a broader trend for sit-down restaurant chains, which are struggling to maintain a steady clientele.

In Nation's Restaurant News' 2017 Top 200, Bertucci's ranked No. 189 in US systemwide sales with an estimated $184.5 for the fiscal year ended December 2016.

The chain has been trying to lure diners with its new Express Lunch, which promises to bring orders within 15 minutes.

The obligations under the Senior Credit Facility are secured by first priority liens on generally all of Bertucci's and each of its affiliates' assets, with the exception of the assets held by Bertucci's Holdings LLC.

Landis Rath & Cobb LLP is serving as Bertucci's bankruptcy counsel, and Schulte Roth & Zabel LLP is the Company's special corporate counsel.

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