For sale: The Palm high-end steakhouse chain.
The big-city concept famous for its simply grilled thick steaks and customer caricatures on the walls has commenced its sale by hiring Raymond James & Associates to broker a deal. A change in ownership of the 93-year-old family-run operation is expected to be completed by the end of the quarter to satisfy legal obligations imposed by a federal bankruptcy court.
The Palm consists of 21 restaurants, the licensing rights to three other sites, and real estate in New York City and East Hampton, N.Y. All of the properties have remained in operation through a long stretch of legal wrangling and family squabbles.
The operation generated sales of $102 million in 2018, according to research firm Technomic, a sister company of Restaurant Business.
Proceeds from a sale will be used by debtors in the Chapter 11 proceeding, the grandchildren of the brand’s founders, to repay their cousins $120 million. The payment will settle a dispute over what Bruce Bozzi and Walter Ganzi, the two cousins who run 21 of the restaurants, were paying the brand’s parent company as a licensing fee. Their cousins and co-owners Gary Ganzi, Carol Breen and the estate of a third relative, Charles Cook, had contended in a lawsuit that the fees were far below market value. A judge agreed and directed Bozzi and Walter Ganzi to pay the plaintiffs $120 million.
The Palm’s operating company, Just One More Restaurant, then filed for bankruptcy protection, saying it needed time to explore alternatives for the business. Bozzi and Walter Ganzi own 80% of the company, and their cousins hold the other 20%.
The disgruntled cousins initially accepted the reasoning, saying they’d like to keep the asset within the family. Bozzi and Walter Ganzi then filed for Chapter 7 personal bankruptcy, essentially suspending their $120 million obligation. Their cousins then sued again, saying the assets and revenues of Just One More Restaurant kept its principles in sound financial shape. A judge agreed, essentially clearing the way for the sale.
The Palm began in 1926 when two immigrants, Pio Bozzi and John Ganzi, opened a steakhouse with that name in midtown Manhattan. The establishment became a landmark and a known hangout for celebrities, whose patronage was celebrated with caricatures adorning the wall. Having a caricature in The Palm became a status symbol for the city’s power elite and carried similar prestige as the brand expanded to other locations.
The original restaurant closed in 2017.