Portland-based investment firm Sortis Holdings announced Tuesday that it acquired Bamboo Sushi parent Sustainable Restaurant Group out of bankruptcy for $2 million.
The agreement was approved by a Delaware bankruptcy court earlier in the month. Bain Capital Double Impact and Kitchen Fund, which led a strategic investment in Sustainable Restaurant Group in 2018, have reinvested in the company.
The firm said it intends to reopen restaurants, rehire furloughed employees, and implement the growth strategy that was interrupted by the pandemic. While that strategy is underway, Sustainable Restaurant Group is continuing to offer off-premises at three locations in Portland. Sortis plans to keep members of the restaurant’s management team and add members of its own.
The firm will operate nine locations across Portland, Seattle, the Bay Area, and Denver.
Sortis purchased the brand in conjunction with its Sortis Rescue Fund, a $50 million investment fund that “look to capitalize on ‘once-in-a-cycle’ real estate and business opportunities created as a result of the COVID-19 outbreak.”
“We are thrilled to bring our team’s experience, ideas, and energy to the Bamboo Sushi brand,” said Paul Brenneke, founder and executive chairman of Sortis, in a statement. “SRG was built on a thoughtful approach to dining, food sourcing, and growth. It had poor timing for its rapid growth opening four restaurants in the months prior to the pandemic’s once in a lifetime impact, but it’s the kind of company that we believe will survive and thrive in a post-pandemic world.”
The restaurant filed for bankruptcy in May. Before the pandemic, the company was performing well. Revenues reached $18.1 million in 2019, up 35 percent from the previous year. But in late February and early March, the COVID-19 pandemic “severely disrupted” operations. The filing said cessation of normal operations deprived the company of cash flow, without which the brand was incapable of meeting obligations.
Before the bankruptcy, restaurant founder Kristofor Lofgren was battling investor Bain Capital in court. Lofgren sued the private equity firm for defamation and breach of fiduciary duty.
In 2018, the private equity firm planned to invest $15 million to help the brand expand. But according to the lawsuit, Bain Capital was considering withholding half of the promised investment unless the restaurant improved its margins. Lofgren was later fired in March over allegations of embezzlement, theft, and fraud. In the lawsuits, Lofgren sought $4.7 million for his termination and $5 million for the restaurant.
The company started with Bamboo Sushi in 2008 in Portland. The parent derives its name from an “environmentally conscious design” including reclaimed timber, low-flow water systems, and renewable resources. Bamboo Sushi identifies itself as the world’s first sustainable sushi restaurant.
Bamboo Sushi is the latest company to be purchased after moving through bankruptcy amid the pandemic.
A federal bankruptcy court approved a $93 million credit bid by senior lender Fortress Investment Group to purchase CraftWorks, parent of Logan’s Roadhouse and Old Chicago. The price was $45 million less than the original offer. Fortress also bought southern fast-food chain Krystal for nearly $50 million after the chain declared bankruptcy in January.
Bankrupt FoodFirst Global, owner of Brio Tuscan Grille and Bravo Cucina Italiana, agreed to a $30 Million deal with Earl Enterprises, and Aurify Brands said it plans to reopen more than 40 Le Pain Quotidien units after agreeing to purchase the brand out of bankruptcy for $3 million.