A Texas bankruptcy judge approved the $18 million sale of Cajun chain Razzoo's Inc.'s assets to a subsidiary of a Dallas-based restaurant developer, which plans to keep operating 11 of Razzoo's 20 remaining locations.
At a hearing Tuesday, U.S. Bankruptcy Judge Alfredo R. Perez approved the sale, calling it a "very good outcome for this case."
"It could have certainly taken a different turn, which would not have been as value maximizing," he said.
Thirty Three 97 LLC's purchase of Razzoo's assets is valued at about $18 million, including a $14 million credit bid and more than $4 million in assumed liabilities, which "we think is an excellent result for this business," debtor attorney Matthew Okin said.
"It's certainly more than our original lender thought we were going to get as evidenced by their willingness to sell out of the debt early on in this process," Okin said. "And we think the buyers are getting themselves a good solid business that they can build off of, even at that price and those assumed liabilities."
Thirty Three 97 made its credit bid after purchasing the debtor's prepetition debt and debtor-in-possession loan from First Horizon Bank. It was named the winning bidder earlier this month after no other qualified bids for Razzoo's assets were received, according to court documents.
The buyer is a subsidiary of Dallas-based M Crowd Restaurant Group Ltd., which develops and operates restaurants in Texas such as Mi Cocina, The Mercury and Vaqueros, according to court documents.
Addison, Texas-based Razzoo's filed for bankruptcy relief in October, citing both assets and liabilities estimated between $10 million and $50 million.
The restaurant chain blamed its financial woes on shifting consumer behavior following the COVID-19 pandemic, rising competition, heavy lease burdens and an inability to service debt.
Razzoo's, founded in 1991, once operated 24 locations across Texas, North Carolina and Oklahoma.
Before it hit Chapter 11, Razzoo's closed four underperforming locations, leaving 20 in operation.
With the sale, 11 restaurants will continue operating, Okin said.
"Most importantly, the buyers are taking 11 of the stores as operating stores, so we're preserving those jobs and those lease spaces for the benefit of the people that have the economic interest there," Okin said.
Razzoo's is represented by Matthew Okin, Ryan A. O'Connor and Kelley Killorin Edwards of Okin Adams Bartlett Curry LLP.
Thirty Three 97 LLC is represented by Kevin M. Lippman and Jonathan S. Petree of Munsch Hardt Kopf & Harr PC.
The case is In re: Razzoo's Inc., case number 4:25-bk-90522, in the U.S. Bankruptcy Court for the Southern District of Texas.
To read more, click here.