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Bertucci’s Files Chapter 11, with Stalking Horse Bid From Right Lane Dough Acquisitions

April 16, 2018, 07:31 AM
Filed Under: Bankruptcy

Bertucci's, the casual restaurant known for its authentic Italian foods and signature brick oven pizzas, announced that it filed voluntary petitions for relief under Chapter 11 over the weekend in the United States Bankruptcy Court for the District of Delaware with Right Lane Dough Acquisitions, LLC serving as the Stalking Horse Bidder.  Under the asset purchase agreement, the Stalking Horse Bidder has agreed to purchase substantially all of Bertucci's assets and assume certain liabilities, subject to higher or otherwise better offers.

The transaction is intended to maximize value for all stakeholders through a fair, open Bankruptcy Court-approved sale process in which Bertucci's will consider all bids for a sale or restructuring of the company. As part of the bankruptcy filing, Bertucci's has sought Bankruptcy Court approval for the consensual use of cash collateral and $4 million in debtor-in-possession financing which will allow the company to meet its post-filing obligations in the ordinary course of business for customers, employees, trading partners, suppliers, vendors, and other creditors.

According to court records, as of the Petition Date, the Debtors were parties to three secured credit agreements, including a Credit Agreement dated September 30, 2015, with CIT Bank and Wells Fargo Bank, N.A. The Senior Credit Agreement provides for an initial term loan commitment of $32.5 million and a revolving credit commitment of up to $5 million. 

The obligations under the Senior Credit Facility are secured by first priority liens on generally all of Bertucci's and each of its affiliates' assets, with the exception of the assets held by Bertucci's Holdings LLC. In late 2017, one or more Termination Event occurred and are continuing. Bertucci's requested that the Senior Credit Lenders forbear from exercising their respective rights and remedies until January 31, 2018.The Senior Credit Lenders agreed and the parties entered into a forbearance agreement dated
November 7, 2011.
To participate in the bidding process and to receive access to due diligence parties must submit to the Debtors an executed confidentiality agreement in the form and substance satisfactory to the Debtors and evidence demonstrating "the party's financial capability to close a transaction involving some or all of the Acquired Assets as determined by the Debtors, in consultation with the Debtors' prepetition senior secured lender, CIT Bank," records show.

"Today's filing is expected to be seamless for Bertucci's guests, trading partners and vendors, and result in minimal disruption to its operations, allowing us to strengthen the company's financial structure and position it for significant future growth," said Brian Wright, CEO.

Wright concluded, "We are grateful for the service and loyalty of our team members and are looking forward to focusing on a return to Bertucci's roots: authentic, high quality, fresh ingredients that guests and team members alike crave and care about."

59 Bertucci's locations remain open for business, and Bertucci's anticipates completing its restructuring process expeditiously so the Company will emerge under new ownership, with an improved financial position and stronger brand.
Landis Rath & Cobb LLP is serving as Bertucci's bankruptcy counsel, and Schulte Roth & Zabel LLP is the Company's special corporate counsel.  Brian Wright will continue to serve as CEO, and Brian Connell will continue to serve as CFO.

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