Buca di Beppo: Chapter 11 363 Sale Process for Restaurant Assets
BUCA Texas Restaurants (Buca di Beppo) filed chapter 11 to pursue a court-supervised section 363 sale process for substantially all restaurant assets, pairing the sale track with interim liquidity and continued operations during the marketing period.
BUCA Texas Restaurants, L.P. and affiliated debtors—the operating entities behind the Buca di Beppo Italian-American restaurant chain—filed chapter 11 petitions in the Northern District of Texas on August 5, 2024. The filing came after a multi-year footprint contraction and continued margin pressure from higher food and labor costs amid softer demand. Instead of pursuing a long-dated reorganization, the debtors launched a lender-led process centered on a section 363 sale of substantially all assets, supported by a roll-up-heavy DIP term loan provided by Main Street Capital, the company’s long-time secured lender.
The Buca case is a useful case study for restructuring professionals because it compresses several modern patterns into a single timeline: (i) a sponsor/owner-controlled restaurant brand with a shrinking unit base; (ii) a secured lender that can control the case path through cash collateral, a roll-up DIP, and a stalking horse bid; (iii) a sale process designed to move quickly with limited bid protections; and (iv) a post-sale posture where operations ceased and the debtors moved to convert to chapter 7, citing unpaid administrative claims and limited remaining estate liquidity.
From a stakeholder standpoint, the case is also a reminder of where value tends to sit in a distressed restaurant chain. For a brand like Buca, the asset base is not factories or owned real estate; it is a set of leases, licenses, IP/brand rights, vendor relationships, employee know-how, and customer data. Those are often best transferred through a 363 process that can assign leases and licenses and deliver “free and clear” title. But once the buyer takes the operating footprint and the debtors stop operating, the remaining estate is typically a wind-down shell with administrative claims, potential litigation, and a small set of residual assets (cash collateral, liquor licenses, and claims). That is the setup where conversion to chapter 7 becomes plausible—especially if the debtor lacks a funded chapter 11 plan path.
Case Snapshot
| Debtor(s) | BUCA Texas Restaurants, L.P. (lead) and affiliated debtors (jointly administered) |
| Brand | Buca di Beppo |
| Court | U.S. Bankruptcy Court for the Northern District of Texas (Dallas Division) |
| Lead case number | 24-80058 (SGJ) |
| Petition date | August 5, 2024 |
| Primary secured lender / DIP lender | Main Street Capital Corporation |
| Prepetition secured debt (reported) | ~$39.0M owed to Main Street at filing (plus fees/costs) |
| DIP facility (final; reported) | $36.3M superpriority term loan (new money + roll-up) |
| DIP pricing (reported) | 15% interest; default rate +2% |
| Sale path | 363 sale with Main Street as stalking horse; sale order entered November 4, 2024 |
| Sale buyer | BDB Intermediate, LLC (successful bidder identified as Main Street Capital Corporation) |
| Post-sale posture | operations ceased; conversion motion filed January 3, 2025; conversion reported February 2025 |
Lender-Led 363 Sale: Roll-Up DIP, Credit Bid Purchase, and Post-Sale Conversion Effort
Company background and footprint: a shrinking family-style dining chain with legacy brand value. Buca di Beppo was founded in 1993 and developed into a national family-style Italian concept with a distinctive dining-room format. Industry reporting described Buca operating 44 restaurants at the time of the chapter 11 filing and closing 13 underperforming locations in the week before filing (Restaurant Business Online; Restaurant Dive). Reporting also noted how far the footprint had contracted: 95 locations in 2013, 76 in 2019, and 64 in 2023—illustrating a sustained downtrend rather than a one-year dip (Restaurant Dive; Nation’s Restaurant News). Local coverage highlighted closures in Texas, including Austin and San Antonio, underscoring that the contraction was geographically broad rather than isolated to one market (MySanAntonio).
The chain’s ownership context also matters for restructuring analysis. Buca was acquired by Planet Hollywood-linked ownership in 2008, and industry reporting described the brand as being operated within a broader Earl Enterprises portfolio. In a restaurant restructuring, portfolio ownership can affect the availability of related-party support (or friction) and the willingness to keep the brand alive versus liquidate. But in this case, the decisive leverage appears to have been financial rather than branding: Main Street Capital’s secured position and financing control points shaped the case path.
| Footprint metric | Reported figure | Source |
|---|---|---|
| Restaurants operating at filing | 44 | Restaurant Business Online; Restaurant Dive |
| Closures immediately prepetition | 13 in week before filing | Restaurant Business Online |
| Peak unit count (historical) | 95 (2013) | Restaurant Business Online |
| Unit count (2023) | 64 | Restaurant Dive |
Performance and liquidity deterioration: declining sales plus cost inflation. Reporting around the filing and the debtor’s court narrative described a familiar restaurant distress mix: demand softening and margin compression driven by food and labor inflation, combined with operational staffing challenges and changes in consumer preferences. Nation’s Restaurant News summarized the company’s stated drivers as declining sales, rising costs, staffing challenges, and preference shifts (NRN). The debtor’s docket research also described a measurable revenue decline: approximately $74.8 million of net revenue in January–May 2024 compared with about $83.5 million in January–May 2023 (a decline of roughly 10%), and a longer-run sales decline of ~14% since early 2021.
Third-party reporting reinforced that the chain had not returned to pre-pandemic revenue levels, while still carrying the cost structure of a large-format, full-service footprint (CBS News). In casual dining, that mismatch is hard to solve quickly: large dining rooms need traffic; off-premise revenue can help but can also be margin-dilutive; and labor cost is not fully variable. That is why many restaurant cases default toward a sale, lease portfolio reset, or liquidation rather than a long plan.
Capital structure: Main Street’s secured debt and why it could drive outcomes. A core feature of the case is the identity and positioning of the secured creditor. Court filings summarized in docket research describe Main Street Capital as the primary secured lender since 2015, with an original term loan principal of $47 million and a petition-date secured debt balance of approximately $38.99 million plus fees and costs. The filings summary also described “protective advances” made in the weeks before filing (including advances in late June and July) that increased Main Street’s secured exposure by roughly $5.05 million.
In restaurant restructurings, a secured lender that controls substantially all assets (and therefore cash collateral) has several levers:
- It can decide whether the debtors have liquidity to operate and run a sale process.
- It can insist on a roll-up DIP that converts prepetition exposure into DIP priority.
- It can be the stalking horse bidder, using a credit bid to acquire assets while setting a floor and controlling timing.
- It can influence which leases and contracts are assumable and which are rejected, shaping the future footprint.
The Buca case shows all of these levers in action, especially through the DIP structure and the sale process architecture.
| Prepetition obligation (reported) | Amount / feature |
|---|---|
| Main Street secured debt at filing | ~$38.99M plus fees/costs |
| Protective advances (prepetition) | ~$5.05M described in filings summary |
| Subordinated loan (insider/affiliate; reported) | $3.0M subordinated loan obligation (April 2022) |
DIP financing and cash collateral: a roll-up-heavy term loan with high pricing and a short fuse. The postpetition financing package was a senior secured superpriority multi-draw term loan provided by Main Street. The final facility size described in docket research was $36.3 million, comprised of (i) $12.1 million of new money and (ii) $24.2 million of roll-up converting prepetition obligations into DIP obligations. That structure is critical: most of the DIP was not incremental liquidity; it was a refinancing of existing exposure into a primed, superpriority claim.
The DIP economics were also aggressive. The reported interest rate was 15% per annum, with a default rate increase of 2%. The maturity concept was effectively a case-control milestone structure: the earliest of 90 days post-petition, consummation of the 363 sale, acceleration upon default, and other triggers. This is consistent with a DIP designed primarily to get the case to a quick sale rather than to finance a multi-year turnaround.
The DIP also included budget and reporting controls: a rolling four-week variance test with a 10% maximum unfavorable variance and budget updates every four weeks. Those covenants are typical in restaurant DIP financings because they provide real-time visibility into burn and prevent cash leakage during the marketing process.
For restructuring practitioners, the most consequential feature is not the headline interest rate; it is the mix of new money and roll-up. A roll-up-heavy DIP changes the negotiating landscape because it converts a large portion of prepetition exposure into DIP priority and can reduce the economic downside of a quick credit-bid sale for the priming lender. At the same time, it can increase friction with administrative claimants and other stakeholders: if the DIP absorbs most of the collateral value and the sale is a credit bid, there may be little cash to pay administrative expenses absent a carve-out, a separate funding source, or a buyer agreement to assume certain costs. That tension becomes especially visible in restaurant cases where vendors, landlords, and employee-related obligations can generate large administrative claims during the case.
| Stakeholder | What a roll-up-heavy DIP can change | Typical practical consequence |
|---|---|---|
| DIP lender / prepetition secured creditor | Converts prepetition exposure into postpetition priority | Stronger position to credit bid and control sale cadence |
| Vendors (food, supplies, services) | Administrative claims accumulate as operations continue | Risk of unpaid admin claims post-sale if proceeds are limited |
| Landlords | Lease performance and cure economics become focal | Increased pressure to reject/assume quickly under sale timeline |
| Professionals | Carve-out adequacy becomes central | Fee disputes can intensify as liquidity tightens |
| DIP component (reported) | Amount | What it functionally did |
|---|---|---|
| New money (interim + final) | $12.1M | Provided incremental liquidity to run the case and operate during marketing |
| Roll-up (interim + final) | $24.2M | Converted prepetition exposure (including protective advances) into DIP priority |
| Total DIP (final) | $36.3M | Combined liquidity + refinancing into a superpriority term loan |
| DIP term (selected; reported) | Economics / controls |
|---|---|
| Interest rate | 15% per annum |
| Default rate | +2% |
| Maturity | earliest of 90 days post-petition, sale consummation, acceleration, or uncured default |
| Commitment fee | 3% on $12.1M new money (reported as $189,000 payable after final order) |
| Budget / variance | rolling four-week budget; 10% maximum unfavorable variance; periodic updates |
| Adequate protection | replacement liens + 507(b) claim + carve-out-limited protections |
Sale process: bidding procedures without bid protections and why that matters. The debtors pursued a section 363 sale path with Main Street as stalking horse. The case’s bidding procedures were scheduled on a tight timeline: bid deadline October 2, 2024; auction October 7, 2024 (if multiple qualified bids); sale hearing October 18, 2024. The overbid increment was $250,000 for the initial and subsequent bids. Cure notice and objection processes were also laid out, with a cure notice deadline in early September and cure objections due 14 days after service.
One procedural point stands out: the filings summary states that no bid protections were authorized. In restaurant sale processes, bid protections can be a flashpoint. They can be value-preserving (encouraging a stalking horse to set a floor and spend diligence money) but they can also suppress bidding (raising the cost of topping bids). Here, the “no bid protections” approach could be read as an attempt to keep the topping-bid hurdle lower and increase the chance of third-party interest. But it also suggests that the stalking horse (Main Street) may not have required protections because it already had control through its lien position and because its “bid” could be structured as a credit bid.
| Sale milestone (reported) | Date / time |
|---|---|
| Bid deadline | October 2, 2024 (4:00 p.m. CT) |
| Auction (if multiple qualified bids) | October 7, 2024 (1:00 p.m. CT) |
| Sale hearing (as scheduled in procedures) | October 18, 2024 (9:30 a.m. CT) |
| Overbid increments | $250,000 initial and subsequent |
| Cure notice deadline | September 5, 2024 |
Sale order: credit bid consideration, buyer identity, and 363(m) findings. The sale order entered November 4, 2024 approved the sale of substantially all assets. The purchaser entity was BDB Intermediate, LLC, and the successful bidder was identified as Main Street Capital Corporation. The consideration was described as a credit bid comprised solely of DIP obligations, and the sale order did not state a specific dollar amount for the credit bid. The order included standard “free and clear” findings under section 363(f) (with assumed liabilities and permitted liens as exceptions) and good faith purchaser protections under section 363(m).
That description is important because it highlights a common mismatch between external “sale price” headlines and the legal sale consideration structure. Industry outlets reported a $27 million stalking horse bid or “sale price” in the fall of 2024, describing the transaction as a credit bid where Main Street would forgive debt and take control of assets (Restaurant Dive; Restaurant Business Online). That $27 million number may be a shorthand for the secured exposure being credited, or a media-friendly representation of debt forgiven, but the sale order summary emphasizes that the formal consideration was structured as a credit bid of DIP obligations, without a single cash purchase price number.
For practitioners, the key point is not whether the headline number is $27 million or another figure; it is that the economic transfer was lender-led: the secured creditor (through its DIP and lien position) acquired the operating assets via a credit bid structure, consistent with a lender taking ownership in lieu of repayment.
| Sale element | Docket summary | Public reporting |
|---|---|---|
| Buyer entity | BDB Intermediate, LLC | Main Street affiliate/designee described |
| Successful bidder | Main Street Capital Corporation | Main Street identified as stalking horse/buyer |
| Consideration | Credit bid comprised solely of DIP obligations; no stated dollar amount in order | “$27M credit bid” reported by industry outlets |
| Core findings | 363(m) good faith; free and clear under 363(f) | Consistent with standard 363 sale reporting |
What happened operationally: closures, gift cards, and consumer exposure. Public reporting around the filing highlighted consumer-facing impacts, including store closures and outstanding gift card balances. CBS News reported unredeemed gift cards of $1.36 million and listed 18 closed locations across multiple states, reflecting the breadth of the footprint contraction (CBS News). In restaurant chapter 11 cases, gift cards and customer deposits are typically treated as unsecured obligations unless there is a court-approved program or a buyer assumption. The existence of a meaningful gift card balance reinforces that consumer obligations were part of the unsecured stack, even though the case’s economic control centered on Main Street’s secured position.
Gift cards also illustrate a broader restructuring point: in restaurant cases, consumer obligations are often “small per claimant but large in aggregate,” and they can become reputational flashpoints even when they are not economically senior. A brand that sells gift cards is effectively taking unsecured working capital from customers. In a going-concern 363 sale, buyers sometimes choose to honor gift cards to preserve goodwill, especially if they are acquiring the brand and continuing operations. But when the transaction is a lender-led credit bid and the estate is liquidity constrained, there may be limited ability to fund a customer program unless it is baked into the sale economics. That is why gift card disclosures tend to track closely with how the buyer intends to operate post-sale and whether the buyer views the brand as a long-term platform or a short-term asset recovery.
Post-sale posture: why the debtors sought chapter 7 conversion. The conversion motion filed January 3, 2025 described a post-sale estate with limited remaining liquidity and significant unpaid administrative claims. The debtors reported that operations ceased after the November 4, 2024 sale order, that more than $10 million of DIP obligations remained outstanding, and that administrative claims included approximately $1.5 million owed to Sysco and Edward Don. The motion described remaining assets as roughly $1.3 million of cash collateral (with approximately $995,836 reserved for professionals), five liquor licenses, and litigation claims of unknown value.
This is the classic post-363 “empty estate” scenario. Once operations cease and the business is sold, the debtor’s options narrow:
- If there is a funded chapter 11 plan path (e.g., sufficient cash to pay administrative expenses and propose distributions), the debtor can confirm a plan and administer claims under a plan administrator.
- If there is not enough cash to cover administrative claims and there is no going-concern value left to monetize, chapter 7 can become the default, because a chapter 7 trustee can pursue residual assets and litigation claims and can address the administrative overhang under trustee control.
In this case, the debtors argued that conversion was in the best interests of the estate given the limited assets and the need for an independent trustee to administer remaining matters. A court-record summary in sources.md indicates that the case was converted to chapter 7 on February 5, 2025, after the sale closed in November 2024.
From an estate-administration perspective, conversion also changes who holds the steering wheel. In chapter 11, a debtor that has sold substantially all assets but remains in possession still has to manage claim reconciliation, potential avoidance actions, and residual asset monetization—often while facing a large administrative overhang and without meaningful operating cash flow. In chapter 7, a trustee can consolidate decision-making about whether to pursue litigation claims, how to monetize small residual assets (like liquor licenses), and how to address competing administrative claims in a structured liquidation framework. That shift can be attractive when there is no realistic path to fund a chapter 11 plan and when the primary remaining work is liquidation and claims reconciliation rather than a business turnaround.
| Post-sale item (reported in conversion motion summary) | Amount / description |
|---|---|
| Remaining cash collateral | ~$1.3M (with ~ $995,836 reserved for professionals) |
| Admin claims (examples) | ~$1.5M owed to Sysco and Edward Don |
| Residual assets | five liquor licenses; litigation claims (unknown value) |
| DIP obligations outstanding (reported) | >$10M |
| Conversion motion filed | January 3, 2025 |
| Conversion reported | February 5, 2025 (court-record summary) |
Key professionals and governance changes: CRO + independent managers. The case also reflects the governance steps that often precede a lender-led sale. Docket research described a CRO appointment (William Snyder) on August 4, 2024 and the installation of independent managers in early July 2024. Industry reporting also identified Snyder as CRO at filing (Nation’s Restaurant News). In restaurant cases, the CRO role is often to run the case timeline, manage lender reporting requirements, oversee store closure execution, and produce a sale process that can withstand court scrutiny. Independent manager structures are also common where owners and lenders want to reduce conflict risk and strengthen fiduciary positioning ahead of a sale or liquidation path.
Case timeline: a fast sale-and-wind-down sequence. Even without pulling the full docket in this update, the timeline described in the docket research summary shows a rapid cadence: filing in early August 2024, interim DIP order in early August, bidding procedures order in late August, final DIP order by late August, sale order by early November, and conversion motion in early January. That is a typical speed profile for a lender-led restaurant sale where the objective is to minimize burn and preserve lease/brand value before further sales erosion.
| Date | Milestone (reported) |
|---|---|
| Aug 5, 2024 | chapter 11 petitions filed; first day motions and DIP/cash collateral filed |
| Aug 7, 2024 | interim DIP order entered |
| Aug 12, 2024 | sale and bidding procedures motion filed |
| Aug 26, 2024 | bidding procedures order entered |
| Aug 30, 2024 | final DIP order entered |
| Nov 4, 2024 | sale order entered (substantially all assets) |
| Jan 3, 2025 | motion to convert filed |
| Feb 5, 2025 | conversion to chapter 7 reported (court-record summary) |
FAQs
When did Buca di Beppo file chapter 11 and in what court?
BUCA Texas Restaurants (Buca di Beppo) filed chapter 11 on August 5, 2024 in the U.S. Bankruptcy Court for the Northern District of Texas (Restaurant Dive).
How many locations were operating at filing and what closures preceded the case?
Industry reporting described 44 operating restaurants at filing and 13 closures in the week before the petition date (Restaurant Business Online; Restaurant Dive).
Who was the secured lender and how much debt was owed at filing?
Main Street Capital was described as the primary lender, with industry reporting indicating it was owed about $39 million at filing (Restaurant Business Online).
What were the key terms of the DIP financing (new money vs. roll-up, pricing, maturity)?
Filings summaries described a $36.3M DIP term loan with $12.1M new money and $24.2M roll-up, priced at 15% interest with a short maturity tied to sale consummation and other triggers.
How did the 363 sale process work and what were the major deadlines?
The bidding procedures schedule described a bid deadline of October 2, 2024, an auction on October 7 if multiple qualified bids existed, and a sale hearing on October 18, with overbid increments of $250,000.
Who bought the business and was the purchase a credit bid?
The sale order identified the purchaser as BDB Intermediate, LLC and identified Main Street Capital as the successful bidder, with consideration structured as a credit bid comprised of DIP obligations.
Why did the debtors seek conversion to chapter 7 after the sale?
The conversion motion described a post-sale estate with limited remaining liquidity and significant unpaid administrative claims, with remaining assets largely limited to cash collateral reserves, liquor licenses, and litigation claims.
Was the case ultimately converted to chapter 7, and when?
A court-record summary in the source set states the case converted to chapter 7 on February 5, 2025.
For more expert analysis of chapter 11 cases and restructuring mechanics, visit the ElevenFlo bankruptcy blog.
