Z Capital Group to take ownership of 78-unit Mexican restaurant company through asset sale
Real Mex Restaurants, whose core brands are Chevys, Acapulco and El Torito, has filed for Chapter 11 bankruptcy protection, the company announced Monday.
The filing comes six years after the Cypress, Calif.-based company emerged from an earlier bankruptcy. In a statement, Real Mex said the most recent bankruptcy filing will allow current co-owner Z Capital Group to take total ownership of the brand through an asset sale.
Terms of that deal were not disclosed. However, Z Capital Croup and co-owner Tennenbaum Capital Partners have agreed to provide $5.5 million in “financing to ensure an efficient bankruptcy and sale process.”
The company said Real Mex restaurants, which has 78 restaurants under seven brands, will remain open and operate as usual during the bankruptcy process. The bankruptcy does not impact 11 independently owned and operated Chevys restaurants.
“Today's filing is an important step in completing the sale process that Real Mex began late last year," Bryan Lockwood, Rel Mex CEO, said in a statement. "The support from Z Capital and Tennenbaum will help minimize any disruptions and ensure that the process is seamless for our guests, employees and vendors. We're looking forward to completing this transaction as swiftly as possible and emerging from Chapter 11 in a stronger financial position, poised for future growth."
When Lockwood was named CEO in 2015, the former Tavistock chief executive implemented a turnaround plan that included overhauling existing restaurants and shuttering cash-poor locations. Lockwood was the company’s fourth CEO in five years at the time.
In 2016, he also said the company was looking to add another brand with annual sales between $100 million and $300 million to its portfolio. He wanted a concept that appealed to a younger generation of diner.
Instead, the company’s focus has been on modernizing some of its core brands and closing units with no chance of survival. At the end of 2015, Real Mex operated about 109 Chevys, Acapulco and El Torito restaurants. Today, the company’s portfolio of chains, and independent concepts totals 78. One of its one-off concepts is Las Brisas in Orange County, Calif.
The company spent thousands of dollars remodeling the iconic Las Brisas, known for its panoramic views of the Pacific Ocean in Laguna Beach, Calif. The restaurant had remained largely untouched since it took over the old Victor Hugo Inn space in 1979.
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