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Report: Piccadilly Restaurants reorganization plans under review

Report: Piccadilly Restaurants reorganization plans under review

Atalaya Capital submit plans for ownership, current owner Yucaipa expected to reject proposal

A U.S. Bankruptcy Court is considering several reorganization plans for Piccadilly Restaurants LLC, which filed for Chapter 11 bankruptcy protection more than year ago, according to new reports.

New York investment firm Atalaya Capital Management and an unsecured creditors committee have submitted a plan to take over the Baton Rouge, La.-based Piccadilly brand, which operates cafeterias and contract foodservice locations, according to a report in The Advocate Friday.

Atalaya holds a significant amount of Piccadilly debt, which it purchased from Wells Fargo in April 2012.

Picadilly Restaurants owner Yucaipa Cos. LLC, which bought the chain in 2004 after earlier bankruptcy proceedings, is expected to reject the plan, the report said, as the proposal would include Yucaipa giving up any ownership stake..

Piccadilly, which was founded in 1944, has closed nearly 20 units in the past year. It now operates 60 cafeterias and about 80 contract foodservice locations in the Southeast.

Court documents indicate Piccadilly has reported a monthly profit just once since its September 2012 Chapter 11 filing. In August, the company reported losing $1.7 million on sales of $10.3 million, according to a recent operating statement filed with the bankruptcy court.

The brand  filed its own reorganization plan in July, which called for putting the chain’s assets into a newly created holding company. Assets in the new holding company would be used to back payments to some unsecured creditors.

At the time of the September 2012 bankruptcy filing, Piccadilly chief executive officer Thomas J. Sandeman said Chapter 11 reorganization would “help ensure a continuation of the Piccadilly brand, provide future employment to our employees and not disrupt service to our customers in any way."

Contact Ron Ruggless at [email protected].
Follow him on Twitter: @RonRuggless

TAGS: Finance
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