Romacorp files prepackaged Chapter 11

New York, Nov. 7 - Romacorp, Inc. made a prepackaged Chapter 11 filing that will give bondholders 90% of the company's equity.

The filing was made Sunday in the U.S. Bankruptcy Court for the Northern District of Texas.

Romacorp listed assets of $20.769 million and liabilities of $76.309 million. It put its secured debt at $13.6 million and unsecured debt at $59.222 million.

The company is owned 100% by Roma Restaurant Holding Inc. which is in turn 22.223% owned by Sentinel Capital Partners LP, 37.038% owned by Sentinel Capital Partners, II, LP, 19.75% owned by NPC International, Inc., 6.84% owned by Bear Stearns Merchant Bank, 5.66% owned by Travelers Insurance Co. and 5.54% owned by Travelers Casualty and Surety Co.

The largest unsecured creditor was listed as the Bank of New York as trustee for $58 million of senior notes due 2008, followed by Highland Capital Management, LP of Dallas with $13.03 million of the senior notes, Wells Fargo of San Francisco with $11.23 million of the notes, Prudential of Newark, N.J., with $7.03 million of the notes, Credit Suisse First Boston of New York with $6.14 million of the notes, Northstar/ING Investments LLC of Scottsdale, Ariz., with $5.57 million of the notes, and Northeast Investors of Boston with $4.69 million of the notes. All other unsecured creditors had claims of less than $1 million.

The Dallas-based operator of the Tony Roma's restaurant chain said that despite continued growth in new franchised restaurant openings and strong sales increases from remodeled company-owned restaurants in recent years, high-interest debt incurred during the 1990s had stifled its progress.

Refinancing the debt, combined with the resulting change in ownership, should provide a much stronger platform for future growth, the company said.

"We are excited about the opportunity to restructure our company," said Romacorp chief executive officer David Head in a news release. "This will allow us to accelerate our growth plan, which includes a very successful new prototype and a remodel package that is delivering double-digit sales increases. Tony Roma's is successful and well known throughout the world, and once this process is behind us, we look forward to taking this great brand to new heights."

Romacorp expects to exit Chapter 11 in the first quarter of 2006.

The case number is 05-86818.

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