Another restaurant group — owner of Houlihan’s, J. Gilbert’s, Bristol — goes bankrupt
A restaurant company that owns 47 restaurants, including brands found locally like Houlihan’s, J. Gilberts and Bristol, filed for bankruptcy on Thursday.
HRI Holding Corporation, which traces its lineage to 1992 when it opened as Gilbert/Robinson Inc. in Leawood and has since expanded into 14 states with 3,450 employees, is the second local restaurant group to seek bankruptcy protection this week.
Last Saturday, Bread & Butter Concepts, the restaurant company behind brands like Gram & Dun and Stock Hill, filed for bankruptcy.
HRI Holding listed $79.8 million in assets next to liabilities totaling $76.9 million. Franchise restaurants are not included in the bankruptcy proceedings and restaurants under HRI Holding will continue operating during the bankruptcy.
“We expect the process to be seamless for our guests, team members and vendors and look forward to continuing to provide our guests with the same great experience they expect when they dine with us,” said Mike Archer, chief executive officer, HRI Inc., in a written statement.
In a bankruptcy filing that detailed the reasons for HRI Holding’s bankruptcy, chief restructuring officer Matthew Manning said restaurant industry headwinds, senior management changes and shifts in its investment philosophy left the company without the funds to grow the business and absorb costs.
In May 2018, HRI Holdings bought 17 Houlihan’s restaurants from A.C.E. Restaurant Group with the intention of refreshing some of the existing locations, according to Manning. But HRI Holding’s liquidity problems prevented that work from occurring, leading to the company closing down underperforming locations.
The company closed 12 of its unprofitable locations after it was not able to renegotiate rent and lease concessions with various landlords. HRI Holding has not paid interest or debt service to its lenders since December 2018, according to bankruptcy filings.
HRI Holding also blamed “unsustainably high occupancy costs” at several of its locations, which accounted for $3.5 million of its annual losses in earnings before interest, taxes, depreciation and amortization.
In April, HRI Holdings entered into a forebearance agreement with its lenders and sponsor, York Capital Management, while a sale was being explored. That forebearance agreement was scheduled to expire on Friday, and HRI Holding decided that bankruptcy was the best course of action.
Another restaurant group, Landry’s LLC, is a stalking-horse bidder in the HRI Holding bankruptcy estate, meaning it could buy the company out of bankruptcy if no better offers are received. Landry’s stalking horse bid is $40 million in cash.
In its bankruptcy filings, HRI said it has limited cash, no realistic financing option and that the only alternative to a sale is liquidating the business.
The first Houlihan’s opened on the Plaza in 1972, by famed Kansas City restaurateurs Joe Gilbert and Paul Robinson.
It had mismatched chairs, church pews, brick walls -- or walls papered in red, hot pink, yellow, blue and silver. A bar was flanked by traffic lights to serve as “sobriety indicators.” The menu ranged from hamburgers and hot dogs to Belgian waffles and New Orleans bouillabaisse.
There are currently 72 locations under the Houlihan’s, Bristol Seafood Grill, Bristol Seafood + Steak, J. Gilbert’s Wood-Fired Steak & Seafood, and Devon Seafood + Steak logos.
Eight locations closed on Tuesday - six Houlihan’s and two Devon operations - but none in the Kansas City market. A spokeswoman said there were no plans to close more locations at this time.
This story was originally published November 14, 2019 at 10:50 AM.
