After about six months in bankruptcy, Daphne’s Greek Café said Monday it will emerge from Chapter 11 through a sale to a holding company formed by banking firm Trefethen Advisors LLC.
Daphne’s San Diego-based parent Fili Enterprises Inc. filed for Chapter 11 in January, and chief executive George Katakalidis promised at the time the bankruptcy would be short. As part of the sale agreement announced Monday, which is still subject to court approval, Katakalidis will step down as chief executive and be replaced by William Trefethen, founder of Trefethen Advisors.
Terms of the sale were not disclosed, but officials said in a statement that Trefethen will form a new holding company to acquire Daphne’s operating assets and assume certain liabilities. The transaction is expected to close in August.
According to the company’s statement, the 65-unit fast-casual chain will emerge as a “well capitalized and significant long-term player.” Trefethen plans to capitalize the company with “additional equity capital and a new, undrawn liquid facility,” the company said.
“My colleagues and I look forward to working with the valued employees at Daphne’s to create one of the market’s leading fast-casual dining companies,” Trefethen said in a statement.
Noting that Daphne’s was founded 19 years ago in 1991, Trefethen said the chain has a loyal customer base.
“Our primary goal is to strengthen the brand through careful growth and a strategic marketing plan that will enhance guests’ dining experiences through new menu offerings, value pricing, and new promotions featuring Daphne’s unique offering of fresh, healthy Greek-inspired dishes,” he said.
Earlier this year, Katakalidis said the chain had breached a loan covenant about two years ago and had tried unsuccessfully to renegotiate terms. Punitive default rates and slowing sales resulting from the economic downturn forced him to turn to reorganization.
Known for its contemporary Greek menu, Daphne’s features Greek dishes such as hummus, grilled meats, salads, kababs and pita sandwiches, with an average check of about $7.
Once boasting more than 80 units, the company, which operates all but one licensed location, had closed about 14 stores in the year before filing for bankruptcy. Another four appear to have closed since the filing.
Trefethen also founded American Commercial Capital LLC, which was sold to Wells Fargo in 2001 and became Wells Fargo Restaurant Finance.
Greg Hernandez, Daphne’s vice president of operations, said, “On behalf of all of the employees at Daphne’s, I am excited to partner with our new ownership group, which is well-positioned to support the strategic initiatives necessary to build on the company’s strong position in the marketplace as the country’s largest Greek-inspired fast-casual chain.”
Contact Lisa Jennings at [email protected]