American Restaurant disclosure statement approved, confirmation hearing set for June 22

By Ted A. Knutson

Washington, April 22 - American Restaurant Group, Inc. won approval for its disclosure statement and judge Thomas B. Donovan scheduled a confirmation hearing for June 22 at 1 p.m. ET.

At the U.S. Bankruptcy Court for the Central District of California Friday, judge Donovan also extended the Los Altos, Calif.-based restaurateur's exclusivity period to June 27.

The company's proposed reorganization plan is based on agreements tentatively reached during informal mediation, particularly between the creditors committee and the holders of the company's 11½% senior notes - although the ad hoc committee of holders of the 11½% series D senior secured notes due 2006 filed an objection Monday.

Under the plan, the senior notes with $179 million of claims and unsecured claims totaling $20 million would be treated identically, being exchanged for 98.75% of the stock of the reorganized company for an estimated recovery of 47.3%. Noteholders will receive class A stock and holders of unsecured claims will receive class B stock with special rights to elect one of five directors.

Existing stockholders will receive 1.25% of the new common stock.

American Restaurant Group had previously filed four amended disclosure statements and plans of reorganization but they were criticized by creditors and none met with court approval.

American Restaurant, which runs the Stuart Anderson's steak house chain, filed for Chapter 11 on Sept. 28, 2004. Its case number is 04-30732.

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