Buffets Holdings Inc

As of March 6, 2009, Buffets Holdings Inc., the second-largest family restaurant operator in the U.S., decided it would be impossible to land a $120 million loan to finance the pending Chapter 11 plan. Even though the bankruptcy judge in Delaware approved an explanatory disclosure statement in December, Buffets modified the plan and will attend a hearing March 11 for approval of revised solicitation materials.

According to Bloomberg, the new iteration of the plan gives secured creditors the ability to participate in a new exit loan facility. If it’s fully subscribed by existing creditors, the company will leave reorganization with a $200 million second-lien credit just as the prior plan assumed.

In that event, secured lenders would have 93 percent of the new stock, senior noteholders would have 5.7 percent, and unsecured creditors would receive 1.3 percent.

The revised disclosure statement, like the predecessor, says senior noteholders will recover 4.8 percent while other unsecured creditors will see 4 percent.

Sources and Related Articles:

• Delphi, Lehman, Nortel, Buffets, Magna: Bankruptcy
• Buffets lines up $120 million loan for bankruptcy exit

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