The bankruptcy of a Kansas restaurant company has cast uncertainty over the future of its five Indianapolis-area restaurants—three Chammps Americanas and two Fox and Hounds.
Wichita, Kan.-based F&H Acquisitions Corp. said in court papers after filing for Chapter 11 in December that it wants to sell “substantially all” of its restaurants.
F&H operates Chammps locations in Circle Centre mall downtown, in Keystone at the Crossing and at Indianapolis International Airport. The Fox and Hounds are near Castleton and near U.S. 31 in Carmel.
F&H does not plan to close any restaurants as it reorganizes, spokesman Rick Van Warner said this week.
The company is trying to restructure its ownership and debt, ideally keeping some of the current owners on board, while keeping the restaurants themselves intact.
“We’re not piecemealing and selling off the companies, not these three restaurants here and these five restaurants here,” Van Warner said.
The restructuring process is “going along as expected,” he said.
Veteran retail broker Steve Delaney predicted the Chammps restaurants will survive, even if it’s under new ownership, but the future for the Fox and Hound locations is dicier.
“The Champps here in Indianapolis do real well. So I think they’re going hang in there,” said Delaney, a principal with Indianapolis-based Sitehawk Retail Real Estate. “The Fox and Hound is different.”
F&H, which owns and operates 101 restaurants in 27 states, was founded in Arlington, Texas, in 1994. The company has about 6,000 employees.
It operates 50 Fox and Hound units, 35 Champps locations, and 16 Bailey’s Sports Grilles. It franchises an additional 11 Champps locations.
In its Dec. 14 Chapter 11 filing, the company listed debt of roughly $119 million, including $68.4 million in first-lien secured loans; $39.8 million in second-lien secured loans; and $11.2 million to landlords, trade vendors and other unsecured creditors.
Circle Centre Mall LLC was named as an unsecured creditor with a claim of $52,731.39
“The recession has been a primary factor in the decline in the debtors’ sales, as consumers prioritized the savings of dining at home over eating out,” James Zielke, chief financial officer of F&H, said in a court filing.
F&H began seeking buyers in February to help it avoid bankruptcy. After contacting 164 banks and investors, the list of prospects was whittled down to five potential new owners. But no one bought.
In the fall, the company returned to its potential buyers in hopes of finding a stalking horse to set the minimum bid in a bankrupcy auction. Those meetings, again, did not produce anyone interested before the December court filing.
In the meantime, company sales have fallen. Revenue dropped 5 percent in the first nine months of 2013, to $218.8 million.