Piccadilly Restaurants Files Chapter 11 After Talks Break Down
Piccadilly Restaurants, LLC announced that last week, debt restructuring talks broke down with its lender, Atalaya Capital Management, a New York-based vulture fund. On Friday, September 7, Piccadilly learned of an aggressive legal maneuver by Atalaya against the company to appoint a receiver. In response to this unwarranted action, Piccadilly filed Chapter 11 to protect the value of its enterprise and the interests of employees, creditors and customers, including schools and emergency feeding customers. Piccadilly continues to serve without interruption over 9,000 meals per day to evacuees and serves 30 schools across the Southeast.
Thomas J. Sandeman, CEO, of Piccadilly Restaurants, LLC, noted that the filing was unexpected but unavoidable due to the litigation. Part of the company’s debt was recently purchased by Atalaya. The secured debt includes $6.9 million on a revolving credit, $2.9 million on a letter of credit facility, and $16 million on a term loan. A commitment for debtor-in-possession financing of up to $5 million has already been put in place from an affiliate of the owner, court documents said, providing the company with ample liquidity. While the current recession has negatively affected operations and cash flow, the company continues to produce positive EBITDA results and within the last year has doubled sales of its food service division.
“The filing will help ensure a continuation of the Piccadilly brand, provide future employment to our employees and not disrupt service to our customers in any way,” noted Sandeman. “While we are disappointed in Atalaya’s behavior at the bargaining table, we believe that the restructuring creates an opportunity for the company to build on its recent success.”
Headquartered in Baton Rouge, LA, Piccadilly Restaurants, LLC has been serving families throughout the Southeastern United States since 1944. Currently, Piccadilly has nearly 80 restaurants and over 70 food service operations and employs approximately 3,500 team members.