American Restaurant plan takes effect

Caroline Salls

Pittsburgh, July 14 - American Restaurant Group, Inc.'s plan of reorganization became effective on Monday, according to a Wednesday filing with the U.S. Bankruptcy Court for the Central District of California.

The plan is based on agreements tentatively reached during informal mediation, particularly between the creditors committee and the holders of the company's 11½% senior notes.

Overall the plan cuts debt by $204.5 million to $21.1 million.

The $179 million of note claims and $20 million of unsecured claims will be exchanged for 98.75% of the stock of the reorganized company for an estimated recovery of 47.3%.

Noteholders will receive class A stock and holders of unsecured claims will receive class B stock with special rights to elect one of five directors.

Existing stockholders will receive 1.25% of the new common stock.

Wells Fargo Foothill has committed to a $40 million exit facility.

The Los Altos, Calif.-based restaurant company, which runs Stuart Anderson's, a steak house chain, filed for Chapter 11 on Sept. 28, 2004. Its case number is 04-30732.

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