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Investment firm acquires Bamboo Sushi parent out of bankruptcy

Sortis Holdings acquired Sustainable Restaurant Group and plans to implement its pre-pandemic growth strategy.
Photo courtesy of Bamboo Sushi

Sortis Holdings, a Portland, Ore.-based investment fund, has acquired the owner of Bamboo Sushi, Sustainable Restaurant Group (SRG), out of bankruptcy court.

Sortis, using a “Rescue Fund” established to take advantage of a market expected to be flush with struggling companies looking for buyers, was approved as the buyer earlier this month.

Sortis made the initial bid for SRG, agreeing to repay financing provided to the company to get it through the bankruptcy process, or no more than $1.9 million, plus $100,000 and the assumption of liabilities.

An auction for SRG was canceled after no other bidder expressed an interest in the company. A bankruptcy court then awarded SRG to Sortis.

Yet many of SRG’s previous investors have in turn invested in the company again through Sortis, including Bain Capital Double Impact Fund and Kitchen Fund, which led a strategic investment in the company in 2018.

The sale was approved over the objections of Kristofor Lofgren, SRG’s founder who was terminated in March, after Bain hired a consultant who analyze the business, according to court documents. Lofgren had previously sued SRG and Bain, arguing that he was wrongfully terminated. An independent investigation by the bankruptcy court ultimately sided with SRG, according to documents.

SRG looked for a buyer but ultimately filed for debt protection in May, with the company arguing that it was “not able to generate sufficient revenue to meet our day-to-day and long-term obligations.”

The company had just over $4 million in unsecured debt.

In its release, Sortis said it will operate nine Bamboo locations in Portland, Seattle, the Bay Area and Denver and that “it anticipates future growth.”

The company said it intends to reopen restaurants once given the go-ahead by state and local governments and ultimately plans to implement its pre-coronavirus growth strategy. Sortis plans to retain members of SRG’s existing management team but will add members of its own hospitality team. SRG is offering pickup and delivery at three locations in the Portland area.

“SRG was built on a thoughtful approach to dining, food sourcing and growth,” Paul Brenneke, founder and executive chairman of Sortis, said in a statement. “It had poor timing for its rapid growth, opening four restaurants in the months prior to the pandemic’s once-in-a-lifetime impact. But it’s the kind of company that we believe will survive and thrive in a post-pandemic world.”

Sortis has previously invested in real estate and expanded its consumer team last year to identify “culturally relevant companies” in lifestyle, food and beverage, hospitality, health and wellness. Its Rescue Fund previously acquired Rudy’s Barbershops out of bankruptcy in May.

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