Cypress-based Real Mex Restaurants Inc. identified a bid from a group of creditors as the frontrunner in its bankruptcy auction, according to court documents filed Monday.
Real Mex and its creditors are in talks to finalize the bid and terms of the purchase, according to court documents.
Real Mex operates the El Torito, El Torito Grill, Acapulco and Chevys Fresh Mex restaurant chains. It also operates smaller chains, such as Las Brisas in Laguna Beach.
Real Mex sought Chapter 11 bankruptcy protection in October after a prolonged sales slump across its chains.
A Feb. 3 auction generated bids from a group of creditors under RM Opco LLC. The firm is made up of Santa Monica-based investment manager Tennenbaum Capital Partners LLC, JP Morgan Investment Management Inc. in New York, and Lake Forest, Ill.-based Z Capital Partners LLC.
Z Capital and Washington D.C.-based asset manager Carlyle Group bought Salt Lake City, Utah-based Mrs. Fields Famous Brands LLC, which also owned the TCBY frozen yogurt chain, in December.
RM Opco said they intend to continue a marketing strategy for RealMex that started last year and has included restaurant and menu redesigns along with new advertising, according to the proposal filed in court.
RM Opco would take an 85% stake in the company if the bid is approved.
Real Mex executives selected RM Opco’s bid over another from La Palma-based Friendly Franchisees Corp.
A final decision by the bankruptcy court is expected on Feb. 10. Terms of Friendly Franchisee’s bid were not available in the most recent court documents.