Bloomin' Brands agreed to buy substantially all of Out West Restaurant Group's assets after the 61-unit Outback Steakhouse franchisee filed for bankruptcy Monday. The deal puts Bloomin' Brands in line to take control of the western U.S. restaurants if the court approves the sale.
Out West Restaurant Group, formally known as Cerca Trova Restaurant Group Holdings, filed in the U.S. Bankruptcy Court for the District of Delaware. The starting purchase price is $26.3 million, with adjustments and some liabilities still to be worked through. That gives the case a concrete floor before any competing bidder can try to top it.
Bloomin' Brands' $5.5 million support
Bloomin' Brands also agreed to provide up to $5.5 million in interest-free financing so Out West can keep covering operating expenses and the professional and administrative costs tied to the Chapter 11 case. Access to that money would be available only when operating cash falls below the minimum needed, which limits the company’s draw on the facility while the case moves ahead.
Out West plans to keep paying newly incurred franchise fees and royalties owed to Bloomin' Brands, and it also plans to keep paying rent under leases guaranteed by Bloomin' Brands. For a restaurant portfolio, that means the case does not start with a full stop; it is built to keep the units open while the ownership structure is reset.
December 2023 defaults on hold
In December 2023, Bloomin' Brands, the franchisee and its lenders reached an agreement to delay payments and hold off on enforcing certain rights tied to earlier defaults. Under that agreement, a bankruptcy filing would have triggered repayment of amounts owed to Bloomin' Brands and substantial sums owed to lenders, with lenders paid first. The filing put those repayment provisions on hold instead.
Bloomin' Brands said the filing does not immediately affect restaurant operations. Out West has asked for permission to pay certain employee, vendor, supplier and other obligations incurred before its petitions, and Bloomin' Brands would become the stalking horse bidder pending court approval. That role sets the opening price for a court-supervised sale, and an auction could follow if qualified competing bids emerge.
If the court approves the transaction and no better bid appears, Bloomin' Brands would gain direct control of the franchisee's restaurant assets and the operating insight that comes with them. If a competing bidder surfaces, the sale process could still shift before control changes hands.
