The 12-unit Oceanaire Seafood Room chain will be sold out of bankruptcy, pending court approval, to Landry’s Restaurants Inc. in a deal valued at about $23.6 million, according to Oceanaire’s chief executive.
Terry Ryan, president and chief executive of Oceanaire Inc., said on Friday that the company expected the confirmation hearing in the U.S. Bankruptcy Court for the Northern District of Texas to be held on April 26. The deal included $6.6 million for the restaurant locations and the assumption of $17 million in debt.
“The idea … when we filed for reorganization was [that] we wanted to remain a private company, but that didn’t work out,” Ryan said. “Landry’s became the stalking horse after our first confirmation hearing wasn’t successful.”
Ryan said Landry’s, which operates more than 100 restaurants under the Landry’s Seafood House and Chart House chains, among others, “obviously has a tremendous amount of experience in the seafood business.” He added that the Oceanaire brand is “a perfect fit for them.”
Landry’s did not return calls seeking comment by press time. The Houston-based company has wide hospitality holdings, including Landry’s Seafood House, Rainforest Café, Chart House, Saltgrass Steak House and finer-dining restaurants in its Signature Group. It also owns aquariums and the Golden Nugget Hotels and Casinos in Las Vegas and Laughlin, Nev.
The Oceanaire Seafood Room’s parent company, based in Minneapolis, filed for Chapter 11 bankruptcy protection last July, and shuttered four of its 16 fine-dining locations — units in Charlotte, N.C.; Cincinnati; Philadelphia; and Seattle. The remaining 12 locations remained open during bankruptcy negotiations.
Ryan said he could not predict whether Landry’s will keep Oceanaire’s “very, very lean” corporate staff of 12.
Projections for Oceanaire’s creditors look positive, Ryan noted. “It looks like creditors will be able to do very well on this,” Ryan said, “somewhere around 80 percent-plus as it looks like right now. It’s not often that creditors will get 80 cents on the dollar after filing.”
After the bankruptcy judge approves the bankruptcy plan, Ryan said, “All the debt from Oceanaire will be taken out, and creditors are going to be well taken care of. Oceanaire will be positioned for opportunities in the future.”
The 11-year-old Oceanaire chain “got caught up in the economy,” Ryan said, and got slammed by the recession, which hit fine dining especially hard. “We were opening up five restaurants in ’06 and ’07 that were committed from ’04, and that caused the pain.”
The 12 open restaurants have rebounded after being down in sales as much as 12 or 15 percent. The restaurant locations remain in: Atlanta; Baltimore, Md.; Boston; Dallas; Denver, Colo.; Houston; Indianapolis, Ind.; Miami; Minneapolis; Orlando, Fla., San Diego, Calif.; and Washington, D.C.
CORRECTION: An earlier version of this story incorrectly reported that Landry’s had purchased one Oceanaire Seafood Room restaurant in Dallas for $6.6 million.
Contact Ron Ruggless at [email protected].