Daily News: February 8, 2012

Real Mex Board Accepts Noteholder Bid to Acquire Company’s Assets


Real Mex Restaurants, Inc. said its board has approved a bid to acquire virtually all assets of the company and its subsidiaries from a newly created entity associated with certain of the company’s noteholders including affiliates of Tennenbaum Capital Partners, Z Capital Partners and J.P. Morgan Investment Management.

A sale hearing is scheduled for February 10 at which the Bankruptcy Court will be asked to approve the bid, which was submitted in accordance with auction procedures previously approved by the court. Court approval and satisfaction of various other conditions would clear the way for the purchaser to close the sale within approximately 30 days after the sale hearing. Following the sale the Real Mex restaurants and food production facility will operate outside of Chapter 11 with a substantially improved balance sheet.

Real Mex has been operating its restaurants and food production subsidiary as usual while working to improve its capital structure under Chapter 11. The noteholders include investors that were in the company’s pre-petition capital structure.

“We remain confident in our turnaround plans and are looking forward to putting this challenging but necessary process behind us,” said Real Mex chairman & CEO David Goronkin. “We are close to accomplishing our objectives in the Chapter 11 process and have the right teams in place to move our brands and company forward. A stronger financial foundation will allow us to accomplish this more quickly.”

Real Mex’s decision to restructure was driven by high debt, certain above-market rents and a weak economic environment, particularly in California where most of its restaurants are located. General Electric Capital Corp. has been providing the company with DIP financing during the restructuring process.

Headquartered in Cypress, CA, Real Mex Restaurants is a full-service, casual dining Mexican restaurant chain operator in the United States with 141 company owned and operated restaurants as well as 20 franchised restaurants.

Previously on abfjournal.com:

Court Approves Auction, DIP Financing for Real Mex Restaurants, Friday, November 11, 2011