Buca di Beppo: Italian Restaurant Chain's $27M Credit Bid Sale

Buca di Beppo filed chapter 11 on August 5, 2024, in the U.S. Bankruptcy Court for the Northern District of Texas with about $250,000 of cash, roughly 44 operating locations, and nearly $39 million owed to Main Street Capital Corporation. The filing was structured around a lender-backed sale path: Main Street funded the DIP facility, served as stalking horse, and ultimately acquired substantially all assets through a $27 million credit bid approved in November 2024. The estates later converted to chapter 7 on February 5, 2025, after the debtors said the sale had not produced enough cash to fund a confirmable liquidation plan.

The filing came during a period of higher casual dining filings in 2024, with peers including Red Lobster, TGI Friday's, and Rubio's also seeking court-supervised restructurings.

Company Background and Performance

Established in 1993 in Minneapolis, Buca di Beppo expanded nationally before shrinking back to 44 company-run locations by the petition date. At its peak in 2013, Buca di Beppo operated 95 restaurants nationwide. The First Day Declaration states that Planet Hollywood acquired the chain for $28.5 million in 2008 and that Planet Hollywood affiliates continued providing management services under a 2015 management services agreement as the debtors prepared for bankruptcy.

The chain's financial performance declined in the years preceding bankruptcy. Expert analysis of Technomic data described the bankruptcy as unsurprising given financial trends—revenue declined approximately 9% cumulatively from 2021 to 2023, followed by an additional 5% decline in 2024. Revenue for the first five months of 2024 fell to $74.8 million compared with $83.5 million in the same period of 2023, a 10% decline. Restaurant-level EBITDA dropped 18% to $3.1 million.

Buca closed 13 underperforming restaurants the week before filing for bankruptcy. These closures occurred across multiple states including California (Sacramento), Utah (Salt Lake City, Midvale), Michigan (Livonia, Utica), Pennsylvania (Springs Township), New York (Colonie), and additional locations in Arizona, Colorado, Florida, Hawaii, Indiana, Maryland, New Jersey, North Carolina, and Ohio. Between 2020 and 2024, the chain closed 30 restaurants in total, shrinking from 74 locations to 44 by the petition date.

Path to Bankruptcy: Multiple Financial Pressures

Inflationary pressures on ingredients and supplies and staffing challenges were cited as pressures on the business. Buca employed approximately 3,340 workers, mostly hourly staff, with certain Las Vegas locations also operating under union agreements.

Consumer preferences shifted toward convenience and value, benefiting fast-casual and quick-service formats at the expense of traditional sit-down casual dining. At filing, Buca owed approximately $39 million to Main Street Capital in principal and interest. The First Day Declaration says Main Street exercised control remedies before the filing, installed new independent managers, and brought in CR3 Partners' William Snyder as chief restructuring officer effective August 4, 2024.

Buca's distress mirrored sector-wide challenges. Restaurant prices rose 44% between 2015 and March 2024, compared to a 26% increase in grocery prices over the same period. This pricing gap encouraged consumers to eat at home rather than dining out, particularly at full-service restaurants where check averages exceeded fast-casual alternatives. In 2024, casual dining sales dropped 0.9% while fast-casual chains grew 0.6% and fast-food chains grew 1%—a divergence in consumer preferences. The full-service restaurant segment contracted to nearly 18% smaller in 2024 than in 2019.

Pre-Petition Capital Structure

In 2015, Main Street Capital Corporation provided a $47 million term loan to Buca di Beppo. By the petition date, the debtors owed $38,986,453.54 in principal and interest on that facility, and the First Day Declaration says Main Street had also extended $5.05 million of protective advances through a series of 2024 amendments. The same declaration describes the lender's control-rights exercise and the CRO appointment that preceded the filing.

The company maintained 10 bank accounts for receiving payments and disbursing funds through a centralized cash management system. With $250,000 in cash at filing, Buca sought DIP financing to continue operations.

DIP Financing and 363 Sale Process

Buca secured approval for a $36.3 million DIP facility from Main Street Capital consisting of $12.1 million in new money (later increased to $13.1 million) and $24.2 million in rolled-up prepetition debt. The facility carried a 15% per annum interest rate (17% upon default), a 3% commitment fee, and an initial interim draw of $10.85 million with maturity set for November 30, 2024. The DIP financing required bidding procedures within 8 days of the petition date and sale approval within 75 days.

Despite the formal auction process, no qualified alternative bidders came forward by the October 2 deadline. Main Street won with its credit bid, and the Sale Order approved the transaction after finding that the purchase agreement represented the highest and best offer and that the sale process complied in all material respects with the bidding procedures. The credit bid structure let Main Street apply secured debt against the purchase price rather than contribute equivalent cash to the estates.

As the stalking horse, Main Street could credit bid up to the full value of its secured claims—approximately $75 million including prepetition debt, protective advances, and DIP financing.

First Day Relief and Operational Motions

Buca employed nearly 3,340 individuals, mostly hourly workers relying heavily on wages and tips. The company sought approval to pay approximately $3.7 million in outstanding prepetition wages, vacation, and healthcare obligations. The company also obtained authority to continue honoring gift cards, reservations, and promotional services throughout the bankruptcy.

A separate motion authorized payment of up to $500,000 in prepetition claims to suppliers covered under the Perishable Agricultural Commodities Act (PACA) or Packers and Stockyards Act (PASA). Before filing, Buca had closed 12 of its 56 restaurants, and the Debtors sought to reject leases for these shuttered locations, estimated to save approximately $187,012.98 per month in rent.

Buca's centralized cash management system relied on 10 active bank accounts for receiving payments and disbursing funds. The Debtors obtained authority to continue these accounts postpetition, arguing that any disruption—such as opening new accounts or segregating existing flows—would cause delays in paying vendors, employees, and utilities. The company also maintained authority for intercompany transactions and a purchase card program supporting standard expense and vendor payments, avoiding operational bottlenecks during the restructuring.

The Debtors maintained 13 insurance policies covering general liability, property, workers' compensation, cyber risk, and other exposures, with annual premium costs totaling approximately $3.47 million financed partially through a separate arrangement with AFCO Premium Financing. Tax obligations totaling approximately $1.02 million in sales, use, and franchise taxes required timely remittance. The Debtors sought authority to provide adequate assurance deposits totaling approximately $1.1 million to utility providers.

Professional Retentions

Gordon Brothers was retained to evaluate real estate positions across the portfolio, informing decisions about which locations to assume versus reject. Stout Capital marketed the company to potential buyers, though no competing bids materialized.

The court later approved the debtors' retention of Gray Reed, William Snyder and CR3 Partners, Stout Capital, and Gordon Brothers, while the committee retained Kelley Drye and Oxford Restructuring Advisors.

Stakeholder Disputes and Conversion to chapter 7

The sale process generated creditor opposition. On October 15, 2024, food service suppliers Sysco Corporation and Edward DON & Company objected to the sale, arguing that the proposed closing would leave the estates administratively insolvent and unable to satisfy 503(b)(9) and other administrative claims. The Official Committee of Unsecured Creditors, appointed August 15, 2024, filed a separate sale objection on October 29, 2024, arguing that Main Street was attempting to credit bid assets beyond its collateral package while leaving no cash path for unsecured recoveries. The court later granted the committee standing to pursue estate claims, but the case converted before those claims were litigated.

Despite completing the sale, the estates proved administratively insolvent. The debtors' motion to convert said the sale had not generated cash sufficient to fund a confirmable chapter 11 liquidation, more than $10 million of DIP obligations remained outstanding, and the remaining assets consisted largely of five liquor licenses, cash reserves subject to carve-out restrictions, and litigation claims. The court converted the cases on February 5, 2025. Restaurant operations continued outside the estates under Main Street and Jackmont Hospitality.

Post-Acquisition: New Ownership Structure

Houston-based Main Street Capital Corporation invested over $30 million to acquire Buca di Beppo through the bankruptcy process. Main Street partnered with Atlanta-based Jackmont Hospitality Inc. to manage day-to-day operations. Jackmont, a minority-owned full-service hospitality company founded in 1994, operates under its Atlanta Restaurant Partners (ARP) division, with CEO Daniel Halpern leading the management team.

Post-acquisition initiatives include menu enhancement programs, service training and atmosphere updates, community involvement programs, curbside pickup and delivery expansion, and reopening select previously closed locations (including San Diego).

Industry Context: 2024 Casual Dining Bankruptcies

Buca di Beppo joined a series of casual dining chain bankruptcies in 2024. Red Lobster filed chapter 11 and closed 120+ locations. TGI Friday's, One Table Restaurant Brands, Rubio's, and Tijuana Flats also sought bankruptcy protection. Non-bankrupt chains also contracted: Denny's closed 73 locations, Frisch's Big Boy 57, Applebee's 35, and Chili's 21. The full-service restaurant segment overall contracted by nearly 18% from 2019 to 2024.

Texas Roadhouse and Chili's Grill & Bar invested in service quality and maintained competitive pricing, according to industry reporting. Many bankrupt chains carried debt loads accumulated during acquisitions or previous leveraged transactions. Casual dining brands also faced limits to pricing power as grocery prices increased more slowly than restaurant prices.

Key Case Timeline

The timeline below tracks the management turnover, sale milestones, and eventual conversion that shaped the case, alongside the August 2024 filing announcement.

Frequently Asked Questions

Why did Buca di Beppo file for bankruptcy?

The First Day Declaration cites declining sales, higher food and labor costs, increased debt-service pressure, and changing consumer demand for off-premise and value-oriented dining. With nearly $39 million owed to its primary lender and about $250,000 of cash, the company filed for chapter 11 protection.

Who bought Buca di Beppo out of bankruptcy?

Main Street Capital Corporation, through its affiliate BDB Intermediate, LLC, acquired substantially all of Buca di Beppo's assets through a $27 million credit bid. Main Street had also been the company's primary lender and DIP lender.

Who is the claims agent for Buca di Beppo?

Stretto, Inc. served as the claims and noticing agent in the chapter 11 cases, as reflected in the claims-agent application.

How many locations does Buca di Beppo have now?

The chain peaked at 95 locations in 2013, entered bankruptcy with 44 locations, and operates approximately 41 restaurants post-acquisition under new ownership.

Why were there no competing bidders?

Despite a formal auction process, no qualified alternative bidders came forward. Main Street's position as both prepetition lender and DIP lender let it pursue the assets through a credit bid.

Who is operating Buca di Beppo after the sale?

Main Street Capital partnered with Atlanta-based Jackmont Hospitality Inc., a minority-owned hospitality company, to manage day-to-day operations. Jackmont operates the chain under its Atlanta Restaurant Partners division with CEO Daniel Halpern leading the management team.

Why did the case convert to chapter 7?

The conversion motion said the estates were administratively insolvent and lacked cash to fund a confirmable chapter 11 wind-down after the sale. Conversion put a chapter 7 trustee in place to administer remaining assets, including liquor licenses and litigation claims.

What happened to unsecured creditors?

Unsecured creditors faced a sale structure that produced no cash purchase price for general estate value. The committee obtained standing to pursue estate claims, but the cases later converted to chapter 7.

Was Buca di Beppo's bankruptcy part of a larger trend?

Yes. Chain restaurant bankruptcies reached their highest level since the pandemic in 2024, with Red Lobster, TGI Friday's, One Table Restaurant Brands, Rubio's, and Tijuana Flats all filing for chapter 11. The full-service restaurant segment contracted nearly 18% from 2019 to 2024.

Are gift cards still honored at Buca di Beppo?

Yes. The company announced at filing that all gift cards, reservations, and promotional services would continue to be honored during and after the bankruptcy process. This remains the case under new ownership.

How much DIP financing did Buca di Beppo receive?

The company received a $36.3 million DIP facility from Main Street Capital, consisting of $12.1 million in new money and $24.2 million in rolled-up prepetition debt. The facility carried a 15% interest rate and required expedited sale timelines.

What was the timeline from filing to sale approval?

The case moved from filing on August 5, 2024 to sale approval on November 4, 2024—approximately 90 days. The DIP financing required expedited milestones, with bidding procedures filed within 8 days of the petition date and sale approval within 75 days.

What role did Main Street Capital play before and during bankruptcy?

Main Street Capital served multiple roles: it provided the original $47 million term loan in 2015, extended $5.05 million in protective advances before bankruptcy, supplied the $36.3 million DIP facility, served as stalking horse, and acquired the chain through a $27 million credit bid.

For more chapter 11 case coverage, visit the ElevenFlo bankruptcy blog.