Cerberus Acquires Garden Fresh

by San Antonio Attorney

Garden Fresh Restaurant Corp. will be acquired by Cerberus Capital Management LP through a bankruptcy sale, after the other interested buyers pulled out of potential agreements for the owner of Sweet Tomatoes and Souplantation.

The details of the arrangement were not revealed, but Cerberus was one of the many lenders to whom the restaurants operator owed over $175 million, the bankruptcy filings show.

The acquisition of Cerberus, a private equity firm, allows Garden Fresh toe exit from the bankruptcy proceedings with at least 90 restaurants.

Garden Fresh CEO John Morberg said the process was difficult but necessary on order to revive the restaurants’ brands.

Cerberus surfaced as the probable new owner of Garden Fresh last November, after Cortland Capital chose not to make an offer for the restaurant operator. Earlier, Cortland agreed to go be a “stalking horse bidder,” which means it would but Garden Fresh for a specified amount if no other offers came.

Cerberus replaced Cortland as the “stalking horse bidder”. Court papers show that many possible bidders showed interest at the chain, including Real Mex Restaurants.

Garden Fresh had extended the bidding deadline two times, but none proposed an offer higher than what Cerberus was offering to pay for the company.

The company had been looking for a buyer for quite some time. A prospective investor pulled out from a deal for a share of the Garden Fresh in August, which led it to declare bankruptcy in October. The operator suffered from waning sales and more costly rent and labor after leaseback arrangements to investors.

Garden Fresh is just one of the many restaurant operators that filed for bankruptcy protection in 2016, after traffic and sales have weaken in the industry. Some of the restaurants that filed for bankruptcy are Don Pablo’s, Logan’s Roadhouse Inc., Cosi Inc., and the owner of Fox & Hound and Champps, and Buffets LLC.

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