Another restaurant company may be acquired out of bankruptcy by its lender.
Breakwater Management LP has emerged as the stalking horse bidder for the Tender Greens and Tocaya Modern Mexican brands, which are moving toward a bankruptcy auction next month.
Parent company One Table Restaurant Brands LLC filed for Chapter 11 bankruptcy protection in July, and the company said it has been seeking a buyer for one or both brands since 2022.
Breakwater was the source of a more than $28 million credit facility for the Los Angeles-based One Table and has provided $3 million in additional funding to keep operations going for the 24-unit Tender Greens and 15-unit Tocaya through the bankruptcy process, according to court documents.
The auction is scheduled for Sept. 27, and, if Breakwater’s bid is successful, court approval could come as soon as Oct. 1, according to the plan filed in court documents. Breakwater officials are seeking a $500,000 break-up fee if another buyer is approved.
Breakwater as a long history with the company and was an investor when the two brands were brought together under the One Table platform in 2021.
Years before that in 2018, Breakwater made a $20.85 million equity investment in The Madera Group, which was the parent of Tocaya before the merger with Tender Greens. At the time, the investment was meant to fuel the growth of the healthful, fast-casual Tocaya concept.
Based in Los Angeles, Breakwater was also an early investor in Veggie Grill when that chain was led by Greg Dollarhyde.
Restaurant bankruptcies have been rampant this year, and a number of brands have been acquired by their lenders as a result of the process, including most recently Red Lobster.
This week the court approved the sale of the Orlando, Florida-based casual dining chain to a group led by lender Fortress Investment Group, which was a stalking horse bidder with co-investors TCW Private Credit and Blue Torch.
A similar scenario could play out in the bankruptcy of Buca di Beppo, for which private-equity firm Main Street Capital has emerged as the stalking horse bidder with a $27 million credit bid.
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