Avado to use grace periods on note payments

By Carlise Newman

Chicago, Dec. 1 - Avado Brands Inc. said it will use the 30-day no default grace period for its note payment due Dec. 1 on its 9¾% senior notes. The company also said it will likely use the 30-day grace period for the payment on its 11¾% senior subordinated notes due Dec. 15.

The company is in covenant default on provisions of its secured credit facility and is negotiating with its secured lenders to address those defaults, Avado in a news release.

The company said previously that there was substantial doubt it would be able to maintain compliance with the terms of the secured credit facility.

Avado said it has not yet filed its third-quarter form 10-Q and anticipates that it will do so before Dec. 31.

Avado appointed Ted Burr of AlixPartners LLC as its chief restructuring officer. Burr joins interim chief executive officer Kevin Leary and chief financial officer and treasurer Louis Profumo.

Avado has repeatedly been late making interest payments on its notes, making use of the 30-day grace period, although in June it had anticipated that it would pay the coupons on time after amending its credit facility to provide additional liquidity.

Madison, Ga.-based Avado is the parent company of Don Pablo's Mexican Kitchen and Hops Grillhouse & Brewery.

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