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Landry’s makes stalking horse bid for Restaurants Unlimited

Portfolio company offers $37.2M in bankruptcy court; auction set for Sept. 18

Landry’s LLC has made a $37.2 million stalking horse bid for Restaurants Unlimited and affiliates in U.S. Bankruptcy Court for the District of Delaware, but bidding remains open through Sept. 16.

Houston-based Landry’s, which has more than 600 properties under more than 60 brands, made its bid Wednesday in filings with the Delaware Court, where Seattle-based Restaurants Unlimited filed for Chapter 11 bankruptcy protection on July 8.

Other bids, which the court said in filings must match or be higher than Landry’s “qualified” bid, will be considered at an auction scheduled for Sept. 18 at the debtors’ firm of Klehr Harrison Harvey Branzburg in Philadelphia. A court hearing on the auction results is set for Sept. 23

Landry’s, owned by CEO Tilman Fertitta, operates such brands as Landry's Seafood, Chart House, Saltgrass Steak House, Bubba Gump Shrimp Co., Claim Jumper, Morton's The Steakhouse, McCormick & Schmick's, Mastro's Restaurants and Rainforest Café.

Restaurants Unlimited operates 35 fine-dining and polished casual restaurants in six states. Immediately before the its July 8 filing, Restaurants Unlimited closed six restaurants immediately before filing the bankruptcy petition: two Palomino locations, in Indianapolis and Bellevue, Wash.; Prime Rib & Chocolate Cake in Portland, Ore.; Henry’s Tavern in Plano, Texas; Stanford’s in Walnut Creek, Calif.; and Portland Seafood Co. in Tigard, Ore.

Four entities filed for bankruptcy: RUI Holding Corp., RU Corp., Restaurants Unlimited Inc. and Restaurants Unlimited Texas Inc., all 100% owned by Sun Capital subsidiary Sun RUI LLC, based in Boca Raton, Fla. RUI Holding Corp. said in filings that its assets and liabilities were both between $50 million and $100 million. Most of its top 30 creditors are vendors.

In a declaration in support of the filing, RUI Holding Corp. chief restructuring officer David Bagley, who was appointed on June 17, said revenue for the 12 months ended May 31 was down by 1% from the previous year, to $176 million.

Bagley said that over the past three years, RUI’s profitability had been “significantly impacted” by minimum wage increases in many of its markets, including Seattle, San Francisco and Portland, Ore.

Nation’s Restaurant News’ most recent Top 200 estimated RUI’s sales at $185.8 million from a year-end 41 locations for the 12 months ended on or near March 31. That was down 1.3% from the preceding year's estimated sales of $188.1 million from 42 locations.

Landry’s stalking horse agreement calls for a breakup fee of more than $1.1 million and a cap on expenses of $300,000.

Fertitta, who hosts CNBC’s “Billion Dollar Buyer” and has a book called “Shut Up and Listen!” coming out in September, last invested in an online ordering and delivery platform.

His Landcadia Holdings Inc., an acquisition shell company that he took public in 2016, in May 2018 agreed to buy Lake Charles, La.-based Waitr Inc. for $308 million.

RUI runs restaurants under the names of Clinkerdagger, Cutters Crabhouse, Fondi Pizzeria, Henry’s Tavern, Horatio’s, Kincaid’s Maggie Bluffs, Manzana, Newport Seafood Grill, Palisade, Palomino, Portland City Grill, Portland Seafood Company, Scott’s Bar and Grill, Simon & Seafort’s, Skate’s on the Bay, Stanford’s and Stanley & Seafort’s.

Landry’s affiliated companies include the Golden Nugget Hotel and Casino locations.

Contact Ron Ruggless at [email protected]

Follow him on Twitter: @RonRuggless

Alan Liddle, senior data and events editor, contributed to this report.

TAGS: Finance
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