Bankrupt, Houlihan's accepts $40M bid from Landry's

Parent company HRI Holdings is simultaneously seeking Chapter 11 bankruptcy protection and a purchase by Tilman Fertitta's empire.
Photograph courtesy of Houlihan's

The parent company of Houlihan’s and several sister restaurant concepts has filed for Chapter 11 bankruptcy protection while simultaneously accepting a “stalking horse” offer to be acquired by Landry’s for $40 million and the assumption of certain liabilities.

The moves follow the closing of 12 unprofitable stores, according to court documents. The closures have pared the company’s restaurant portfolio to 47 polished-casual establishments, 34 of which operate under the Houlihan’s name. It is also the franchisor of 23 additional locations.

The filings indicate that HRI Holding Corp. owes about $47 million on a December 2015 loan. HRI has not made a debt or principal payment since December 2018, the documents show. The company agreed in June to seek a sale as a way of meeting its debt obligations. The loan comes due in December 2020.

For Landry’s, the extensive holding company of Houston billionaire Tilman Fertitta, the purchase of Houlihan’s and its sister brands would add another five concepts to a fold that already includes polished casual ventures such as Morton’s The Steakhouse, McCormick & Schmick’s, Mastro’s, Chart House and Salt Grass Steak House. 

In addition to Houlihan’s and J. Gilbert’s, Houlihan’s operates or franchises Bristol Seafood Grill, Devon Seafood Grill and a new concept, Make Room for Truman. 

Landry’s has amassed its empire in part through the use of stalking horse bids, typically lowball offers that serve as the minimum bid in an auction of assets. In exchange for essentially establishing a minimum bid, the stalking horse bidder is typically promised compensation for any costs related to its acquisition efforts if a higher bid is put forth.

HRI said it has received new financing commitments to keep its restaurants open until a transaction is completed. It also indicated that it intends to complete any deal by the end of the year.

"We expect the process to be seamless for our guests, team members and vendors and look forward to continuing to provide our guests with the same great experience they expect when they dine with us," said HRI CEO Mike Archer in a statement. 

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