While most of the active restaurants in SBG’s portfolio were performing, the Company’s aggregate financial profile had become stressed over time due to the compounding impacts of several adverse dynamics. A failed international J.V., the forced sale of profitable locations, and capital-intensive remodeling obligations, coupled with increased debt service on its loan through the Main Street Lending Program as well as a non-bank lender, combined to severely impact the Company’s liquidity. As a result, the Company was forced to close underperforming stores and seek Chapter 11 bankruptcy protection. The Company hired SC&H Capital to simultaneously explore a new money plan of reorganization and sale of some or all the restaurants.
SC&H Capital conducted an exhaustive marketing process, which included in-depth discussions with strategic buyers (both in the Wendy’s system and outside the system), private equity groups, family offices, and alternative lenders. Ultimately, SC&H Capital received multiple bids for the entire portfolio and others for select locations. The Debtors selected a stalking horse bidder for certain Florida restaurants and another for a portion of the restaurants in Alabama. With a very strong stalking horse, no superior bids were received for the Florida restaurants, and a competitive auction was conducted for the Alabama stores which produced incremental value for the Estate.
