After filing for chapter 11 bankruptcy in June, Michigan-based Greek chain Olga's Kitchen is now up for grabs. Two bidders have set their eyes on restaurant group founded in 1970 by Olga Lorizon, including an affiliate of TEAM Schostak Family Restaurants (local franchise operator of Detroit's new Applebee's and MOD Pizza) and a newly formed corporation in Troy dubbed Cosmo Hospitality LLC. The company addressed the sale via social media on November 11, calling it "a positive step for our iconic brand."
According to the Detroit Free Press, Schostak initially tested the waters with an $8.3 million offer. The group already owns a 50 percent stake in 11 Olga's locations that aren't involved in the bankruptcy case. Schostak is aiming to take full control of those properties in addition to 15 of Olga's company-owned locations. Cosmo later upped the bid to $8.55 million for 26 Olga's locations, reports Crain's. The sales are expected to be approved on November 23 and close by December 1.
Representatives for the chain have cited its Compuware Building restaurant build-out as a major factor leading to the company's insolvency. The location unceremoniously shuttered in September. At its peak, Olga's Kitchen operated nearly 50 locations and plotted a major brand expansion in late 2013. Bedrock Real Estate has yet to announce a new tenant for the former Olga's space.
Update, 11/23, 7:23 p.m.: TEAM Schostak affiliate SOK Venture officially won the auction for Olga's late Friday evening with a final bid of $10.95 million, according to Crain's. But the fight over the struggling restaurant chain's assets isn't over yet. Several creditors went to court today to delay the sale over concerns that the bid would not secure all of Olga's creditors. The judge is expected to deliver his decision on the sale tomorrow at 10 a.m.
Update, 11/24, 11:52 a.m.: Despite the reservations of some creditors, Olga's Kitchen's sale was officially approved by U.S. Bankruptcy Judge Walter Shapero today. SOK Ventures plans to close the deal by December 11, according to Crain's.