Avado sale imminent?
By Patrick Yost
Madison’s Avado Brands has agreed to sell 83 of its 111 Don Pablo’s Mexican Restaurants and Hops Grillhouse and Brewery restaurants, apparently to an affiliate of the company’s primary bankruptcy lender, DDJ Capital Management LLC, according to published reports.
DDJ Capital, a Waltham, Mass.–based hedge fund, helped Avado emerge from bankruptcy in 2005. Avado has been under Chapter 11 bankruptcy protection since September.
According to reports by the Associated Press, news of the sale came after a Monday, November 26 filing in U.S. Bankruptcy Court in Wilmington, Del. requesting approval of the sale. DDJ is requesting approval to sell Avado’s Madison headquarters and 67 of the restaurants to Rita Acquistion Corp., a subsidiary of DDJ. AP reported that DDJ led a group of lenders that provided a $67 million bankruptcy loan that has allowed Avado to operate throughout the sales period.
Avado will seek the bankruptcy court’s approval of the sale at a December 10 hearing. Representatives with DDJ refused comment Tuesday. Paul Seidman, Avado’s senior vice president of marketing for food and beverage, confirmed Tuesday that the sale request was made but also said all deals were currently in a state of flux. “Nobody really knows,” he said. Seidman said parameters of the proposed sale were “changing every day, every hour.” He did state that he believed once a sale was completed Avado staff would remain in place. “There’s no plans to move the corporate headquarters.”
At its zenith, Avado Brands employed nearly 7,000 people and once owned more than 240 Applebee’s restaurants, along with other chains.