Ruby Tuesday received approval on Friday from the U.S. Bankruptcy Court for the District of Del. to begin a sale process of the company nearly two months after the Maryville, Tenn. casual-dining restaurant chain filed for bankruptcy on Oct. 7.
Ruby Tuesday’s parent company, RTI Holdings, has until Dec. 10 to enter a stalking-horse agreement and until Jan. 14 to submit a bid. An auction will be held no later than Jan. 19, after which RTI Holdings will submit a confirmation order and approve of the sale. The court will then hold a hearing to approve the winning bid on Jan. 22.
RTI Holdings’ bankruptcy filing was approved after the company made some last-minute changes requested by major landlords, including Brookfield Properties Retail Inc., Regency Centers Corp. and Tanger Factory Outlet Centers Inc., which all initially had objections to the sales process.
Secured lenders Goldman Sachs and TCW — which are both owed approximately $40 million by RTI Holdings — are providing financing to Ruby Tuesday throughout the bankruptcy process. The company’s debts are estimated at $56.1 million, according to the bankruptcy filings.
NRD Capital — affiliate of RTI Holdings — acquired Ruby Tuesday in 2017 and is one of the candidates expected to come forward as a potential bidder in the sale.
Ruby Tuesday is not the only company to be bought out of — or attempt to be bought out of — bankruptcy in 2020: Flynn Restaurant Group bid $816 million to buy NPC International out on bankruptcy earlier in November, and the Krystal Company was bought out of bankruptcy in May by Fortress Investment Group.
In the original bankruptcy filing, Ruby Tuesday said that after closing 185 stores (or almost one-third of the company’s portfolio), their remaining 236 company-owned restaurants “will operate as usual” during the bankruptcy process, though they might look to reduce that number to 175-200 restaurants.
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