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Law360 (May 12, 2020, 1:11 PM EDT) -- A West Coast sushi chain told the Delaware bankruptcy court Tuesday that it is seeking a going-concern sale in Chapter 11 in order to weather the COVID-19 closure of its restaurants.
With all 10 of its Bamboo Sushi and Quickfish-brand restaurants closed for ordinary business, Sustainable Restaurant Holdings told the court in its Chapter 11 filings that $1.9 million in debtor-in-possession financing from Bain Capital and a going-concern sale were the only way it had to raise the cash it will need to ride out the pandemic.
"Our goal is to emerge from this process as quickly as possible with a strengthened balance sheet and the necessary capital to rehire our furloughed employees and resume operations at our restaurants whenever it is safe to do so," interim CEO Matthew Park said in a statement released Tuesday.
According to its Chapter 11 declaration the company was founded in 2008 in Portland, Oregon, as the operator of an environmentally sustainable sushi restaurant. It currently operates 10 restaurants in Oregon, Washington, Arizona, California and Colorado under the Bamboo Sushi and Quickfish brands and saw a 35% increase in revenues in 2019, according to the filings.
The company currently has just under $3.2 million in unsecured debt and $910,000 in trade debt, it said.
Due to the COVID-19 shutdowns, only three Portland-area locations are currently open, with those only offering takeout service, Park said. As a result, the company has furloughed all but 38 of its approximately 480 employees and does not have enough cash coming in to meet its lease and vendor obligations, he said.
Park said the company began looking for lenders, investors or buyers in March, but that it became clear no one was going to step forward under "current market conditions." The company switched to looking at bankruptcy and DIP financing this month, and received a single offer from the Bain Capital Double Impact fund for $1.9 million in financing, he said.
"Subject to approval from the court, the DIP financing, combined with the company's available cash, will provide sufficient liquidity for SRH to continue to compensate and provide benefits to its current employees and meet its post-Chapter 11 filing obligations to vendors and other business partners," Park said in the announcement.
The company has retained Getzler Henrich & Associates as its financial advisor and SSG Capital Advisors as its investment banker.
Sustainable is represented by Domenic E. Pacitti, Michael W. Yurkewicz, Sally E. Veghte and Morton R. Branzburg of Klehr Harrison Harvey Branzburg LLP.
The case is In re: Sustainable Restaurant Holdings Inc. et al., case number 20-11087, in the U.S. Bankruptcy Court for the District of Delaware.
--Editing by Alyssa Miller.
Correction: An earlier version of this article incorrectly named Sustainable's financial advisor. The error has been corrected.
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