Ignite Restaurant files plan; auction for assets scheduled for Aug. 7

By Caroline Salls

Pittsburgh, July 7 – Ignite Restaurant Group, Inc. filed a Chapter 11 plan and related disclosure statement Wednesday with the U.S. Bankruptcy Court for the Southern District of Texas that will be funded from the proceeds of the company’s assets sale.

As previously reported, Ignite received a $50 million stalking horse bid for its assets, which is subject to the receipt of higher and better bids. The company said it expects the agreement to yield more than $42 million in gross proceeds after payment of administrative claims, priority tax claims and other priority claims.

“The debtors believe that the value they will realize from the stalking horse agreement constitutes fair market value for their assets and will support a confirmable plan that will maximize value to their various creditor constituencies and bring a successful conclusion to these Chapter 11 cases,” the disclosure statement said.

Under the plan, holders of miscellaneous secured claims will be paid in full in cash or receive the property securing the claim.

Holders of secured lender claims will receive a share of a secured lender fund.

Holders of general unsecured claims will receive a share of a general unsecured creditors fund. Any general unsecured claim that constitutes an assumed liability under the asset purchase agreement and remains unpaid as of the closing date will be paid in full in cash by the buyer in the ordinary course of business.

Holders of convenience class claims will be paid in full in cash.

Interest holders will receive no distribution.

Ignite also received court approval of the procedures for the sale of its assets, according to an order filed Thursday.

Kelly Investment Group affiliate KRG Acquisitions Co., LLC is the stalking horse bidder.

If KRG is not the high bidder for the assets, Ignite will pay it a $1.5 million break-up fee and return its $2 million deposit.

Initial overbids, which are due by 5 p.m. ET on Aug. 3, must at least equal the amount of the stalking horse bid, plus the break-up fee and a $500,000 overbid amount.

An auction will be held on Aug. 7, if necessary.

The sale hearing is scheduled for Aug. 17.

Ignite is a Houston-based owner and operator of restaurant brands, including Joe’s Crab Shack, Romano’s Macaroni Grill and Brick House Tavern + Tap. The company filed bankruptcy on June 6 under Chapter 11 case number 17-33550.

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