MorrisAnderson Interim Management Secures Additional Debt for Growth

Restaurants, Hospitality & LeisureLitigation SupportRefinancing & TransactionsTurnarounds & Restructuring

120M

Annual Sales

30M

in Debt

Restaurants of America, Chicago Illinois

Challenge

Three restaurant groups; Bar Louie, Red Star, Concepts. $120 million annual sales. $30 million debt. 65 locations, plus 8 franchise.

  • 87% year over year growth
  • Liquidity issues due to working capital needs
  • Financial stress resulting from rapid 87% expansion of Bar Louie brand including 25 new locations over an 18 month period.
  • Privately held business had limited financial resources.
  • Ineffective CFO unable to produce compliant financials necessary to raise debt or equity financing.
  • More than five unsolicited letters of intent from interested buyers.

Solution

  • MorrisAnderson engaged to assist in refinancing efforts.
  • CFO unable to effectively manage finances resulting in MorrisAnderson taking over CFO responsibilities on an interim basis.

Results

  • Funded growth by attracting $5 million of debt while MorrisAnderson serving as interim CFO alleviating liquidity issues.
  • Company signed term sheet with a major Private Equity firm, however consummation was interrupted by credit crisis.
  • Company is back on track, liquidity is no longer a concern and comps are positive on a monthly basis.