The deal is for $8 million in cash.

The majority of Iron Chef Jose Garces’ portfolio of restaurants have been sold for $8 million in cash to 3BM1, a company funded by Ballard Brands and Philadelphia-based investor David Maser. Garces will stick on as chief culinary officer.

The deal was approved in U.S. Bankruptcy Court Tuesday. It also included Garces’ events division of his company and assumed liabilities. Two of his Philadelphia restaurants will close with the deal—24 at 24th and Walnut will shutter July 14 and Garces Trading Company, at 1111 Locust, will serve brunch July 15 before shutting down. A statement said employees at both restaurants would be offered jobs at the company’s other Philly restaurants, including the Olde Bar, Volver, Amada, Village Whiskey, JG Domestic, and Tinto. Garces recently closed Distrito in New Jersey and an Amada in New York. Ballard Brands operates restaurants in 28 states and three countries.

“Under the agreement, the intention is to offer employment to most, if not all,” the statement said.

“The transaction will bring stability to the Garces Group’s finances while also bringing Ballard’s decades of experience in launching and expanding successful concepts,” company spokeswoman Kate Wilhelm added in the statement.

Wilhelm said the closures are “an intent to focus on the remaining entities.”

3BM1 also assumes the management contracts for Garces’ casino-hotel restaurants in Atlantic City— Olón and Okatshe in the Tropicana and Amanda and Distrito in Ocean Resort Casino. Management contracts for CHUBB Conference Center and Ortzi are joined in as well.

Philadelphia spots Distrito in University City and Bueno Onda in the Fairmount/Art Museum neighborhood are not part of the sale.  

The deal ends a trying saga for Garces. In May, he announced he filed for bankruptcy and would sell the 13 remaining restaurants in his portfolio, which once numbered as large as 30.

According to the Philadelphia Inquirer, he received an offer of $5 million from Louisiana-based Ballard Brands, which owns the Original City Diner, Wow Café, and PJ’s Coffee.

He then filed paperwork and was almost immediately challenged by his investors who claim Garces misrepresented the details of their initial agreement more than a decade ago. He filed for bankruptcy protection and investor’s attempts to block the bankruptcy were not successful. 

Financial troubles began in 2014 when Revel Casino in Atlantic City closed, with four Garces concepts inside. He was then sued by suppliers and investors. Two groups of investors still have litigation pending against Garces despite the sale.

Feature, Finance