Irvine-based Claim Jumper Restaurants LLC has filed for bankruptcy in an arrangement with a Los Angeles private equity firm that’s buying all of its assets.
The struggling restaurant chain known for its California Gold Rush theme and enormous food portions filed for pre-packaged Chapter 11 bankruptcy on Friday and agreed to sell its restaurants and operations to Los Angeles-based Canyon Capital Advisors LLC.
The restaurant chain, which opened its first location in Los Alamitos in 1977, is expected to emerge from Chapter 11 in about two months with a new ownership, according to a report from Thomson Reuters.
Claim Jumper said its existing lenders agreed to provide debtor-in-possession financing and fund normal operations through the sale process.
Los Angeles-based private equity firm Leonard Green & Partners LP in 2005 acquired a majority of Claim Jumper for an estimated $220 million, which was considered the highest price paid by a private equity firm for a restaurant company.
At the time of the sale, the company attracted bids from eight potential suitors.
The plan was for Leonard Green to drive an expansion outside California with some five to seven restaurant openings a year.
Progress has been slow. Claim Jumper now has about 45 restaurants—up from 35 when it was acquired—with a few beyond the West Coast, including in Wisconsin and Colorado.
The restaurant chain saw an estimated $200 million in yearly revenue last year in the downturn which hit casual dining chains the hardest.
Leonard Green began looking at a sale last year after hiring investment banker Piper Jaffray Cos., according to sources.
Leonard Green sent out an offer in June 2009 targeting other private equity firms, a source familiar with the process said.
About four bidders were believed to be vying for the restaurant chain including former founder Craig Nickoloff.
