Abuelos, the Lubbock-based national restaurant chain, continues to be profitable as it restructures in Chapter 11 bankruptcy.
The latest monthly operating report said Abuelos started June with a $7.7 million cash balance and ended with $8.8 million.
The company also made minor modifications to its proposed bankruptcy plan which still needs approval from creditors with voting rights. A voting date was not yet set in the most recent court records.
Background summary
Abuelos filed for bankruptcy in September with roughly $31 million in both assets and liabilities. The company claimed in its original bankruptcy filing that inflation and wage pressure damaged profitability.
The company is now at 13 locations – eight of them are in Texas:
- Abilene
- Amarillo
- Arlington
- Fort Worth
- Hurst
- Lubbock
- Midland
- Tyler
Abuelos was also operating locations in Arizona, Arkansas, Florida, Kansas and South Carolina as of mid-July when the latest court records were filed.
At its peak, the chain was roughly 40 locations nationwide – in no less than 13 states.
Much of the updated bankruptcy plan remains the same. We reported on the plan in March.
However, instead of a consolidated 10-year note for roughly $8 million to pay off one of the creditors, the new plan calls for “exit financing.” The creditor will take $6.6 million plus interest – payment coming from a new secured lender which has not yet been identified.
The plan did not say if the lower amount was negotiated.
The plan also pays off a particular set of secured claims over five years instead of six in the previous version of the plan.
The plan comes with a 35-page disclosure statement from Abuelos for creditors to consider before voting. The disclosure statement needs approval from the bankruptcy court and is the topic of an August 17 hearing in the Fort Worth bankruptcy court.
The plan needs support from a majority of the eligible creditors, and they must represent at least two-thirds of the eligible debt.
