Wall Street Journal:
By Tom Corrigan
A bankruptcy judge signed off on the sale of Joe's Crab Shack and Brick House Tavern + Tap casual-dining chains to Landry's Inc. for $57 million.
Following a hearing Thursday at the U.S. Bankruptcy Court in Houston, Judge David Jones said he was satisfied Landry's offer was the highest and best available.
"I do think the sale process under the circumstances has been fair, has been transparent," he said.
A committee of unsecured creditors on Thursday also voiced support for the sale, the proceeds of which will be used to help repay debts the prior owner of the chains took on before filing for bankruptcy in June.
"This has been a challenging case," a lawyer for the committee told Judge Jones. "We would obviously have liked to have seen a much, much higher price."
Court papers show Landry's, a privately held restaurant and casino specialist, had been eager to buy the restaurants since their parent company, Ignite Restaurant Group Inc., began searching for a buyer.
Landry's, owned by Houston businessman Tilman Fertitta, already operates a broad spectrum of more than 500 restaurants. With the sale approved, it will gain 112 Joe's Crab Shacks and 25 Brick House Tavern restaurants, with many concentrated in Texas, Florida and California.
Landry's agreed to lead the bidding for Ignite's assets with a $55 million offer and won the court-supervised auction for $57 million. Purchase offers Ignite received before filing for bankruptcy were either withdrawn or "not viewed as viable," according to court papers.
In total, Ignite employs more than 8,000 people, court papers show, and the company has continued operating while in chapter 11. Like many of its competitors in recent years, the business has experienced declining comparable-restaurant sales and income.
Ignite also faced a liquidity squeeze after defaulting on its secured debt earlier this year. The company holds a $30 million revolver and $165 million term loan provided by Credit Suisse AG, Credit Suisse Securities LLC and KeyBank Capital Markets Inc.
Private-equity firm J.H. Whitney & Co. holds a majority stake in Ignite, which went public on the Nasdaq Global Select Market in 2012 but was delisted in April.
Write to Tom Corrigan at tom.corrigan@wsj.com
