Granite City Food & Brewery Ltd. today announced that it has filed a voluntary petition under Chapter 11 in the United States Bankruptcy Court for the District of Minnesota. Granite City intends to contemporaneously file a motion seeking approval of auction and sale procedures under Section 363(f) of the United States Bankruptcy Code. Granite City Food & Brewery operates two casual dining concepts: Granite City Food & Brewery and Cadillac Ranch All American Bar & Grill. There are currently 25 Granite City restaurants in 13 states, and the company currently operates four Cadillac Ranch restaurants in four states.
After an intensive review of strategic alternatives, Granite City’s Board of Directors determined that a reorganization of its businesses was needed. The Board further determined that the restructuring could only be accomplished by filing for Chapter 11. Concurrently, Granite City has announced a going concern sale to KRG Granite Acquisition LLC for aggregate consideration of $7.5 million plus certain liabilities. The transaction remains subject to Bankruptcy Court approval and an auction process which is expected to conclude in February 2020.
Granite City has secured a $5 million debtor in possession loan, subject to Bankruptcy Court approval, to fund operations through the auction and sale process. Granite City continues to operate its business as a “debtor in possession” subject to the supervision and orders of the Bankruptcy Court in accordance with the U.S. Bankruptcy Code. Management expects to continue operations without interruption during the Chapter 11 case.
“The Granite City Board of Directors and management team have thoroughly assessed our strategic options and financial situation and unanimously agree that this structured sale process represents the best possible solution for the company,” said Richard H. Lynch, chairman of the board and chief executive officer of Granite City. “We believe pursuing this path will provide value to our creditors, enable one or more future restauranteurs to operate our locations and preserve hundreds of jobs.”
The proposed auction process, if approved by the Bankruptcy Court, would allow interested parties to submit binding offers at the auction to acquire substantially all of Granite City’s assets, free and clear of Granite City’s indebtedness and liabilities.