Negotiating a Debt for Equity Swap Out of Court

Granite City Food & Brewery

Minneapolis, Minnesota

Challenge

Upscale casual dining featuring fresh brewed hand-crafted beers. $90 million annual sales. $30 million debt. 26 locations across 11 states.


  • Lack of working capital.
  • Extensive use of capital leases relating to an expansion program.
  • $74 million of capital leases in secured debt.
  • $90 million in total sales.
  • $3.5 million annual cash loss.
  • Declining sales resulted in need to make implement operational improvements.

Solution

  • MorrisAnderson engaged to lead debt restructuring negotiations with key parties.
  • Lessors holding ground leases.
  • Financial institutions holding equipment leases.
  • Ultimate goal to obtain cash flow relief needed to implement operational improvements.

Results

  • Negotiated $16 million debt-to-equity swap with largest debt holder.
  • Resulted in $3.5 million of annual cash savings.
  • Realized $1.4 million of annual savings associated with real property and equipment leases.
  • $4.9 million of total cash savings realized.
  • Results reveal net income improvement of $1.8 million stemming from operational improvements.

Daniel F. Dooley

Dan Dooley, CTP, is a Principal and CEO at MorrisAnderson based out of Chicago. He has a strong national reputation in crisis management, operations improvement, debt refinancing/restructuring and C-level positions. He is a frequent speaker at industry conferences and a regular author for industry periodicals. Dan has served on the Board of Directors of both… Read More