New York, Jul. 21 - A Fortress Investment Group Inc affiliate Monday offered to take over more than 100 restaurants from bankrupt restaurant operator Buffets Holdings Inc, according to a court filing.
Buffets, which operates the Ryan's and Old Country Buffet restaurant chains, has asked the U.S. bankruptcy court in Delaware whether it can reject a master lease owned by the Fortress affiliate to 127 Ryan's restaurants and close the stores.
In the filing Monday, Fortress said it believes the restaurants generate $40 million a year in cash flow, after rent expenses, and said it would rather take over the stores' operations than have Buffets reject the lease and shut down the restaurants.
Buffets, the largest U.S. steak-buffet restaurant company, filed for Chapter 11 bankruptcy protection from creditors in January, saying its core customers had cut back on their discretionary spending.
A spokesman for Buffets had no immediate comment on the filing.
The 127 restaurants covered in the master lease represent about half of the restaurants Buffets acquired in 2006 when it bought Ryan's for $876 million, including debt.
They also represent about one-fifth of the 569 restaurants that Buffets runs in the United States, earlier this month. About 7,500 part-time and full-time employees work at the restaurants affected by the master lease.
The filing did not mention a price Fortress would consider paying to take over the restaurants' operations. A Fortress spokeswoman declined to comment.
The bankruptcy court ruled in May that Buffets could not pick and choose restaurants to close within the master lease, but rather would have to assume or reject the lease as a whole.
Earlier this month, Buffets filed its subsequent motion seeking to reject the lease and close the restaurants by the end of August. The court is set to hear arguments on the motion at a hearing next week.