Jose Garces has sweetened the pot to help cinch a sale of his restaurants in U.S. Bankruptcy Court, offering to pay $500,000 to M&T Bank to satisfy personal liens against him.
Judge Jerrold N. Poslusny Jr. heard details Thursday in Camden of a proposed sale agreement — totaling about $8.34 million — for Garces' restaurants, management agreements, and catering division. The proposed buyer — Ballard Brands, a Louisiana food company that has been Garces' longtime suitor — also announced that it had increased its $2 million cash offer to $3.5 million, the court heard.
Garces' own $500,000 and Ballard's additional $1.5 million would boost the total price tag by $2 million from Ballard's initial Bankruptcy Court offer of about $6.34 million.
The sale could be confirmed at a hearing July 9. Garces is expected to become a Ballard employee.
His restaurants — including Amada, Village Whiskey, the Olde Bar, and Tinto — are operating as usual; in fact, branches of Amada and Distrito opened Thursday at Ocean Resort Casino in Atlantic City, the former Revel.
Revel's shutdown in 2014, taking with it four Garces restaurants, created a loss of $2.5 million in annual profits, the court heard, and helped set the stage for bankruptcy. The Amada and Distrito restaurants at Ocean are management agreements requiring no cash investment by Garces.
Even at $8.34 million, Ballard could be getting a bargain. Jeff Manning of CohnReznick Capital, retained last year to sell the restaurants, told the bankruptcy judge in May that Ballard originally offered $14 million. But after two Garces investors spurned the deal and Garces filed for bankruptcy protection, Ballard cut its offer to $6,343,000, including $2 million in cash and $2.8 million to cover gift cards and catering deposits.
Though Ballard was the only bidder at a bankruptcy auction this week, its offer did not satisfy M&T Bank, which is owed $7 million. Lawyers negotiated further, to M&T's apparent satisfaction.
Unsecured creditors, now owed several million dollars, would divide $250,000 under the plan.
The sale and bankruptcy would not end other litigation filed by Tom and Maria Spinner and Jim Sorkin, who were early investors in Amada, Village Whiskey, and Tinto. Sorkin also is a minority investor in Buena Onda, a Garces taqueria that was not included in the bankruptcy.