Friendly Ice Cream Corp. has emerged from Chapter 11 bankruptcy with a new owner – private-equity firm Sun Capital-backed Friendly’s Ice Cream LLC – and fewer locations and less debt.
The company, which originally was backed by Sun Capital, filed for bankruptcy protection just over three months ago, in October 2011.
Friendly Ice Cream Corp. is the parent of the Friendly’s family-dining restaurant chain and distributor of Friendly’s retail products.
Friendly’s Ice Cream LLC and its subsidiaries purchased the company at the end of December after the auction to sell the company was canceled on December 21 because there were no other bidders.
Sun Capital, based in Boca Raton, Fla., had originally taken the company private in 2007 for $395 million.
When Friendly’s filed for Chapter 11 in the United States Bankruptcy Court for the District of Delaware, the company cited “the challenges of the economic downturn” as well as rising commodity costs and rents that exceeded market rates. At that time it closed 63 units, said it would undertake a sale process and that Sun Capital would be the lead bidder.
The chain now has 387 restaurants.
In repurchasing the company, Sun shed many of its leases and unsecured debt, including employee pension obligations.