Steak ’n Shake Is Said to Repay March Debt to Avert Bankruptcy

Steak ’n Shake Inc. purchased and retired the remaining balance of its $220 million loan due next month, according to people with knowledge of the payment, averting a potential bankruptcy filing.

The company completed its repurchase from lenders on Feb. 19, said the people, who asked not to be named discussing private transactions.

Steak ’n Shake and advisers including FTI Consulting Inc. and the law firm Latham & Watkins were preparing for a potential Chapter 11 filing earlier this month while the company negotiated with holders of the debt, Bloomberg previously reported. Those investors included Fortress Investment Group. Steak ’n Shake and its advisers declined to comment.

Cash had been running short at the Indianapolis-based restaurant chain because of closures during the Covid-19 pandemic and heavy spending to change its restaurants to a self-service model, the people said. The company tried to sell 15 properties last summer to raise cash, but no sale took place, and parent company Biglari Holdings Inc. had said it wouldn’t guarantee the chain’s loan.

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