Back Yard Burgers Finds a Fresh Start in Charlotte
Charlotte, NC – If you’ve been missing the juicy burgers from Back Yard Burgers, there’s some exciting news on the horizon! The beloved burger chain, which hit some tough times recently, has just been given the green light to move forward after its Chapter 11 bankruptcy filing. The U.S. Bankruptcy Court for the Western District of North Carolina has confirmed the reorganization plan for the company, which is set to take effect on December 1, 2023.
A Pathway to Recovery
The plan is a significant step for Back Yard Burgers, as it provides a roadmap to emerge from bankruptcy and pave the way for future growth. The company is currently operating under the umbrella of Tantum Companies LLC. According to court filings, the revised financial structure is expected to enable the company to generate enough revenue to cover its operational costs comfortably. As stated in a court filing, “Based on the projected financials of the reorganized debtor, the operations contemplated will generate sufficient operating revenue to fund all payments.”
The Journey So Far
Back in June 2023, the chain made headlines when it filed for Chapter 11 after closing some of its Charlotte-area locations. Things got a bit dicey at one point, with discussions about possible Chapter 7 liquidation on the table. Thankfully, with the support of Axum Capital Partners—the firm co-owned by former Carolina Panthers wide receiver Muhsin Muhammad II—the chain found a pathway to reclaim its place in the fast-food scene. Axum first acquired control of Back Yard Burgers back in 2017.
What’s Next for Back Yard Burgers?
So, what does this reorganization plan look like? Well, as part of this plan, Axum will now hold 100% of the interests in the newly reorganized company. With significant amounts of debt needing to be addressed, they provided unsecured loans amounting to a staggering $644,393.63. The financial landscape is painted with estimated unsecured priority tax claims nearing $812,000 and payments owed to Guaranty Bank totaling over $514,000.
Restructuring Financial Commitments
Guaranty Bank’s involvement is notable, too; when the bankruptcy was first filed, the chain owed nearly $10.9 million on loans. As the restructuring unfolds, a plan to repay $1.3 million over a decade is in place, alongside a liquidating trust set up to handle $1.1 million earmarked for unsecured creditors. Additionally, Axum Fund is stepping in to provide some financial support, offering a $250,000 contribution to help shore up the liquidating trust and another $930,000 if things don’t go according to plan.
Facing Challenges Head-On
Back Yard Burgers has faced its fair share of challenges recently—made worse by the COVID-19 pandemic, which put a strain on operations and profits. The company recognizes these hurdles and states in their announcement that they’re focused on long-term strategic goals and finding ways to deliver better value to their shareholders. The current CEO, Mark Cote, is committed to steering the ship as they set out on this new journey.
A Fresh Take on Fast Food
Speaking of their journey, Back Yard Burgers is looking to carve out a niche as a quality alternative in the fast-food market. With a menu full of flame-grilled burgers and sandwiches, the chain aims to differentiate itself from typical quick-service offerings while providing a convenient option that appeals to today’s consumers. Court documents highlight this unique approach, stating that there’s a significant opportunity to enhance their brand based on core values that resonate with long-term consumer trends.
In Conclusion
This new chapter for Back Yard Burgers signals hope for burger lovers in and around Charlotte. While the road ahead might still has bumps, the resilience shown by the company and its leadership paints a promising picture of recovery. So keep an eye out, folks—your favorite burger spot may soon be back flipping patties and serving up smiles once again!
