DENVER The Village Inn and Bakers Square restaurant chains were sold out of bankruptcy to a new owner, American Blue Ribbon Holdings LLC, almost a full year after its former parent company, Vicorp Inc., filed for Chapter 11.
American Blue Ribbon purchased Vicorp’s assets and debts in a deal estimated at $55 million. The sale closed Friday and documents from the U.S. Bankruptcy Court in Delaware show that American Blue Ribbon was to pay $11 million to the debtor in possession and pay off other obligations. The company is now the owner and franchisor of 267 Village Inn and Bakers Square restaurants in 25 states, including 177 corporate locations and 90 franchised units.
“Completing this deal in the midst of such a difficult financial and credit environment is a remarkable achievement and a testament to the strength of our brands,” said Hazem Ouf, president and chief executive of Vicorp.
Ouf, who came to Vicorp as chief restructuring officer in 2007, replacing then CEO Ken Keymer, will stay on as CEO at American Blue Ribbon, the company said. No other executive changes are expected with the sale, the company reported.
American Blue Ribbon is a partnership between Woodlands, Texas-based investment firm Newport Global Advisors and Fidelity National Financial Inc., a Jacksonville, Fla.-based title insurance company led by chairman William P. Foley II. Foley, a veteran restaurateur had been chairman of what is now CKE Restaurants and was involved in various other chains. Under Foley, Fidelity had been considered a potential buyer of Wendy’s International before Triarc Cos. bought the hamburger chain in 2007.
Prior to its bankruptcy filing in April 2008, Vicorp had struggled in the family-dining segment, which was weakened by the slowed economy and strong competition from quick service operators who began to focus on the breakfast segment. It also was saddled with $126 million in debt. Soon after its bankruptcy filing, Vicorp closed 56 restaurants.
In the past few years, Vicorp had undertaken a remodel of its Village Inn corporate units as well as experimented with a bakery-café type concept within its Bakers Square units. Earlier this month it sold four of its Bakers Square restaurants in the San Francisco Bay area to Shari’s restaurant chain.