Old Country Buffet’s parent company has a potential new buyer after a previous deal struck. / Photo: Shutterstock
The intermittent sale of the old Buffets Inc. empire is back on track.
Fresh Acquisitions, the owner of Old Country Buffet, HomeTown Buffet, Tahoe Joe’s and other concepts has another buyer. This time it is Serene Investment Management, an investment firm that had previously bought out debt from FoodFirst Global Restaurants before it file bankruptcy.
According to court documents, Serene has an offer of $ 4.2 million to buy Fresh Acquisitions, including $ 3.2 million, plus an additional $ 1 million in rental fees. The deal also includes warrants that could make the sale price more valuable, depending on the company’s achievement of certain milestones.
As a stalker bidder, Serene has the option of buying the business out of bankruptcy court. Anyone bidding should submit a higher bid and pay a breakage fee.
The auction is expected to take place in two weeks, according to court documents.
This is the second time the buffet company has had a stalking horse bidder and a scheduled auction since filing for bankruptcy in April.
Fresh Acquisitions declared bankruptcy with just six Tahoe Joe’s restaurants open, less than a hundredth of the 650 locations it had at its peak in 2006, when it was known as Buffets Inc. and is the fifth bankruptcy in the world. collective history of chains.
Initially, Fresh Acquisitions had made a deal to sell to VitaNova Brands for $ 3.2 million, plus assumption of liabilities. The $ 3.2 million was a credit offer to repay a loan that VitaNova made to Fresh to bankrupt it, and according to legal documents, the liabilities were largely pre-filing tax liabilities. That makes the total value of $ 14.3 million.
VitaNova appeared ready to buy Fresh Acquisitions after no one came forward to buy the companies until a judge quashed the deal last month.
The denial of the sale came amid questions about the relationship between VitaNova and Fresh Acquisitions as well as concerns about the company’s use of paycheck protection program funds. Unsecured creditors opposed the sale
But a bankruptcy court judge last month quashed the deal, which was criticized in bankruptcy proceedings amid questions over VitaNova’s relationship with Fresh Acquisitions, as well as concerns over the use of funds from the paycheck protection program.
The chain’s creditors questioned $ 12 million in “intercompany payments” in the year leading up to the bankruptcy filing to what they say are insiders or affiliates of Fresh Acquisitions. Creditors have also questioned the use of funds from Fresh Acquisition’s paycheck protection program, saying they “may have been misdirected or misused.”
Creditors also said executives at VitaNova are also “management people” for Fresh Acquisitions, arguing that it was in fact a sale of the company to insiders.
After the judge called off the sale, VitaNova withdrew her offer to buy the business and the process returned to the drawing board.
Serene has made a handful of investments in various businesses, either providing them with loans to get them out of bankruptcy or buying the debt. It acquired the FoodFirst debt last year before going bankrupt and was then sold to Earl Enterprises.