“Obviously it’s a difficult decision,” says spokesman Rick Van Warner.
“Over the last several months, the company has looked at a number of different options to restructure the debt or to restructure the corporate financial structure,” he says. “We decided that the best option to most quickly and efficiently get through the turnaround plan that we’re working on is to do so under Chapter 11 protection.”
The filing lists F&H’s liabilities and assets both as somewhere between $100 million and $500 million.
Van Warner says there have been several issues that led to the company’s struggles.
“It’s been a very soft environment overall for casual dining restaurants, including our concepts,” he says. “In addition, our debt levels from the past were high, and you know, you add all that together along with the fact that real estate markets have changed a lot in the country . . . and there’s a whole number of factors that lead to a financial restructuring of this type.”
Van Warner says the bankruptcy filing will impact the corporation but not day-to-day business at the restaurants.
“It’s not going to impact anything we’re doing at the restaurants,” he says. “Most of the restaurants generate meaningful cash flow still, and our brands are making solid progress.”
There are 50 Fox & Hound restaurants, including one at Wichita’s Waterfront development, which is also where the company has its headquarters. There are 35 Champps restaurants and 16 Bailey’s restaurants, which are the same concept as Fox & Hound.
Van Warner says the bankruptcy filing is more about “a fresh start.” The company also is looking for what Van Warner calls a cash infusion, but he says he can’t be more specific about that.
“It’s hard to tell,” he says of where the money may come from. “It’s a process. It’s to be determined.”
He adds, “We really need a more sound capital structure to have a strong platform for future growth. That’s really what this is about.”
Van Warner says there have been leadership changes at the company in the last year.
Former CEO Steve Johnson left in October 2012.
“I left for personal reasons,” he says.
Marc Buehler is now CEO, and Van Warner says Buehler divides his time between Wichita and Dallas.
“There’s several other new leaders in the company,” Van Warner says.
Fox & Hound had its origins in the late 1980s as a Texas chain that then merged with an East Coast chain called Bailey’s in 1997.
The company went public under the name Total Entertainment that year and eventually became known as Fox & Hound Restaurant Group and became headquartered in Wichita.
Two private equity groups took the company private in 2006, and the name changed to F&H Acquisition Corp.
Those groups also owned Champps, and that chain became part of F&H in 2007.
Van Warner says the company hopes to complete its restructuring by March 4, which may mean it could sell.
“It’s likely to be some combination of current debt holders and equity partners.”