Le Pain Quotidien Wins OK to Get Out of 59 Restaurant Leases
Le Pain Quotidien Wins OK to Get Out of 59 Restaurant Leases
(Bloomberg) -- The U.S. arm of the Belgian bakery chain Le Pain Quotidien won a bankruptcy judge’s approval to get out of leases for 59 restaurants shut down in the fallout from the coronavirus pandemic.
U.S. Bankruptcy Judge John Dorsey acknowledged it was uncommon for a company in Chapter 11 proceedings to seek immediate freedom from the leases at issue in the case. “The relief requested is unusual, but these are unusual times,” Dorsey said.
The decision to seek protection from creditors under Chapter 11 of the bankruptcy code allowed Le Pain Quotidien to shed debt and carry out a $3 million sale, pending court approval, to Aurify Brands LLC. That $3 million will serve as the chain’s bankruptcy financing.
Founded in 1990, Le Pain Quotidien (“the daily bread”) opened its first U.S. store in 1997 and has since become a familiar sight in Manhattan. The entire chain shut down in the U.S. with the advent of the pandemic. Its Belgian parent began its own restructuring in Brussels on May 22, court papers show.
Without the sale, liquidation loomed for its 94 U.S. stores operating just before the shutdown, proposed chief restructuring officer Steven Fleming said in court filings.
A lawyer for Aurify Brands told Dorsey in a teleconference their plan is to immediately reopen 35 of the sites, which employ about 1,000 workers. But the buyer is open to renegotiate even the rejected leases, Aurify’s attorney added.
To decide which leases to target, Le Pain Quotidien officials evaluated “underperforming stores and assessed the impact of operating with a reduced portfolio of restaurant locations on a going-forward basis,” according to court filings.
The case is PQ New York Inc., 20-11266, U.S. Bankruptcy Court, District of Delaware (Wilmington).
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