N.Y. Firm Gets Big Slice of Callender Pie : Acquisition: Merchant bank buys controlling interest in well-known Orange-based restaurant and bakery chain.

A New York merchant bank said Wednesday that it has bought a controlling interest in Marie Callender Pie Shops Inc., one of Southern California’s best-known restaurant and bakery chains.

Saunders & Karp L.P. bought equity that gives its more than a 50% stake in Marie Callender, which operates 146 family restaurants in California and other Western states.

The investment allows Wilshire Restaurant Group, which owns Marie Callender, to recapitalize debt remaining from a management buyout four years ago, according to a joint statement. Other terms of the new arrangement were not disclosed.

Wilshire bought Marie Callender from Ramada Inns with the hope of increasing the restaurant chain’s sales and profit. Wilshire was successful in improving the company’s financial health but not to the point of being able to pay off debt from the buyout, said Michael J. Rietbrock, spokesman for Saunders & Karp in New York.

“The thing’s a great business,” Rietbrock said of the restaurant chain. He said the company expects to keep Marie Callender’s headquarters in Orange and its current management.

Marie Callender officials could not be reached for comment.

Mike Mooslin, who operates a Ruby’s Diner restaurant in Rolling Hills Estates and is a consultant for other restaurants, said Marie Callender needs to solve some identity problems to reach its full potential as a chain.

“If Marie Callender’s is going to make it, they had better jump into the 1990s,” he said. “They have to decide what they want to be.”

The chain is being squeezed in the family dining segment by lower-priced coffee shops and higher-priced dinner houses, Mooslin said. And it stands by the concept of offering pies and baked goods at a time when consumers--Californians, in particular--are shunning foods heavy in fats and oils.

The chain began as a single pie bakery founded in Long Beach in 1948 by Marie Callender. Her son, Don, started a restaurant as an offshoot of the bakery, then built the business into a chain.

He sold the chain to Ramada in 1986 for $57 million in cash and 2.5 million shares of Ramada stock. But the restaurants’ sales decreased under Ramada’s ownership. When it sold the chain in 1989, Ramada said it wanted to concentrate on its hotel and casino businesses.