Fuddruckers Assets Sold
Luby's to pay $61 million for bankrupt restaurant chain's stores and franchise business
June 22, 2010
Luby’s Inc., a restaurant operator based in Austin, Texas, won the bankruptcy auction for most of the assets of burger chain Fuddruckers Inc. with a bid of $61 million in cash, the companies said.
Fuddruckers' parent, Austin, Texas-based Magic Brands, said the sale could result in full payment for unsecured creditors. The company's largest unsecured creditor is US Foodservice, which is owed $2.6 million, according to court filings.
A hearing on the sale’s approval is scheduled for Tuesday in U.S. Bankruptcy Court in Delaware. Judge Brendan Shannon is overseeing Fuddrucker's bankruptcy case, no. 10-11310. The transaction is expected to close on July 9, 2010, Luby's said in its press release.
Luby’s, which owns 96 eateries in Texas and surrounding states, was the successful bidder at the June 17 auction, the company said.
Fuddruckers filed for bankruptcy protection on April 21. In court documents, it listed assets between $50 million to $100 million and liabilities between $50 million to $100 million. Fuddruckers has 60 branded restaurants and franchisees operate 138 restaurants.
Goulston & Storrs and Richards, Layton & Finger are serving as bankruptcy counsel to Fuddruckers.
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