WEST ROXBURY Mass. Uno Restaurant Holdings Corp., the owner of the Uno Chicago Grill casual dining chain, filed for Chapter 11 bankruptcy protection Wednesday.
As part of the prearranged restructuring, the privately held company said it will recapitalize the business and eliminate debt through the conversion of $142 million in senior notes into a controlling equity stake held by a noteholder group. Twin Haven Capital Partners LLC and Coliseum Capital Management LLC hold the majority stake in the noteholder group.
Prior to filing for Chapter 11, the company shuttered 16 underperforming restaurants around the country, leaving a total of 179 company-owned and franchised units still operating.
Calling it "a great day for Uno," Rick Hendrie, senior vice president of marketing, said the company had been weighed down with debt since it sold a controlling interest to New York investment firm Centre Partners Management LLC in January 2005. Centre Partners will retain a much-reduced stake in the restructured business.
"In the winter of 2006 and 2007, we were still seeing same-store sales increases, so even at that point it was still doable," Hendrie said. "But then the recession hit."
URHC generated $286.9 million in revenue for the 12-month period ended Sept. 27, 2009.
Noting that the business remains solid and that there is no problem with liquidity, Hendrie nevertheless said the company had been "stymied by debt. We had $14.2 million in interest payments [annually] and that's gone now. That can all be reinvested."
In addition to Uno Chicago Grill, URHC also operates Uno Express, a quick-service concept; the fast-casual Uno Due Go; and a retail food products business. The business restructuring will present opportunities for growth in all four channels, Hendrie said.
"We're very ambitious about what we want to do," he said. "The debt was our single greatest impediment to growing."
Uno also is planning to seek court approval for a debtor-in-possession financing facility of $52 million from senior lender Wells Fargo Capital Finance Inc., and the noteholder group, particularly Twin Haven.
Hendrie said the company hopes to exist Chapter 11 by late spring.