Filing Alert: Out West Restaurant Group Chapter 11

Update (November 2, 2026): A comprehensive case summary is now available for the Chapter 11 bankruptcy filing of Cerca Trova Restaurant Group Holdings, Inc.

Cerca Trova Restaurant Group Holdings, Inc. (dba Out West Restaurant Group) and its debtor affiliates⁽¹⁾, a San Diego, CA-based franchisee and operator of Outback Steakhouse restaurants, filed for Chapter 11 protection on Nov. 2 in the U.S. Bankruptcy Court for the District of Delaware.

The company attributes its distress to debt it took on to finance expansion, compounded by declining guest traffic, commodity inflation and rising labor costs driven largely by successive minimum wage increases in California. After revenue fell approximately 35% in fiscal 2020 amid the COVID-19 pandemic, the debtors did not repay or refinance their prepetition credit facility at its April 2022 maturity. They have since operated under forbearance agreements, with interest accruing at the default rate and being capitalized into the loan balance. Covenant EBITDA fell from approximately $22.1 million in fiscal 2023 to approximately $8.4 million in fiscal 2025 and approximately $6.3 million for the twelve months ended Aug. 23, 2026, while fiscal 2025 interest expense of approximately $45.9 million was more than five times that year's covenant EBITDA. The debtors missed their $15.0 million minimum EBITDA covenant during 2025, and in April 2026 the prepetition agent, Goldman Sachs Specialty Lending Group, delivered a notice of events of default. With the revolver fully drawn, a $1.6 million wage-and-hour class settlement payment coming due and the forbearance period expiring on Dec. 27, 2026, the debtors say they cannot meet these obligations without a sale.

The filing aims to facilitate a court-supervised, going-concern sale of substantially all of the debtors' restaurant assets, with franchisor Outback Steakhouse of Florida, LLC, a subsidiary of Bloomin' Brands, Inc., serving as stalking horse bidder. The stalking horse APA provides for a $26.3 million cash price, the assumption of certain liabilities and the franchisor's release of approximately $13.9 million in deferred royalties, marketing fees and other obligations, subject to higher or otherwise better offers. The proposed bid deadline is Dec. 8 and the proposed sale hearing is Dec. 15. The franchisor would also provide a revolving DIP facility of up to $5.5 million, which bears no interest and would prime the prepetition lenders' liens with their consent. Prepetition secured obligations total approximately $319.9 million, including approximately $190.9 million in accrued and capitalized interest, fees and other obligations. They far exceed the stalking horse cash price, and the debtors have no material unencumbered assets.

Cerca Trova Restaurant Group Holdings, Inc. reports $0 to $50 thousand in assets and $100 million to $500 million in liabilities. The filing indicates that no funds will be available for distribution to unsecured creditors after administrative expenses are paid. The case number is 26-11749.

⁽¹⁾ For a complete list of debtor entities, see the Chapter 11 Debtors table.

Chapter 11 Debtors

Top Unsecured Claims

Key Parties

Delaware Bankruptcy Co-counsel:

• Bradford J. Sandler
  Pachulski Stang Ziehl & Jones LLP
  Email: bsandler@pszjlaw.com

Bankruptcy Counsel:

• KTBS Law LLP

Financial Advisor:

• Stout Risius Ross, LLC

Investment Banker:

• Brookwood Associates, LLC

Signatories:

• David Goronkin – Chief Executive Officer

Claims Agent:

• Stretto, Inc.

Bondoro Insights is continuing to monitor this case and will provide further coverage as appropriate.

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