Former Real Mex secures initial court order in path to case dismissal

By Caroline Salls

Pittsburgh, April 30 – RM Wind-Down Holdco LLC, which operated Real Mex Restaurants, obtained an initial order Tuesday pertaining to its request for dismissal of its Chapter 11 cases, according to a filing with the U.S. Bankruptcy Court for the District of Delaware.

Under the order, the company may file a certification of counsel requesting dismissal of the cases following payment of all U.S. Trustee’s fees, professional fees, first-priority secured claims and 503(b) claims and remittance of any remaining amounts to its secured lenders.

Professionals’ fee applications must be filed by May 16, and objections to those applications are due by June 5. A hearing will be held on June 12, if necessary.

As previously reported, the company said the sale of substantially all of its assets closed on Oct. 29, 2018, resulting in the satisfaction of its debtor-in-possession financing obligations, the buyer’s agreement to satisfy some administrative expense claims and the payment or assumption of some other debt.

“Although the $46.75 million proceeds from the RM asset sale were sufficient to repay the DIP financing, the debtors commenced these Chapter 11 cases with over $255 million in secured pre-petition indebtedness,” the motion said.

“Given the extent of the secured lenders’ liens and the magnitude of their deficiency claim, any value received by the debtors’ estates on account of remaining assets (and subsequent monetization thereof) would redound to the benefit of the secured lenders.

“Accordingly, there is no reasonable prospect of distributions from any debtor’s estate to any holders of pre-petition unsecured claims against the debtors (other than prepetition claims afforded administrative priority under section 503(b) of the Bankruptcy Code), and the estates do not and will not have available funds to satisfy either priority claims or general unsecured claims.”

In addition, RM Wind-Down said it is unable to pursue a confirmable Chapter 11 plan.

Real Mex is a restaurant company based in Cypress, Calif. It filed for bankruptcy on Aug. 5, 2018 under Chapter 11 case number 18-11795.

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