Restaurant Enterprises Will Shuffle Its Top Executives : Reorganization: SEC filing details new lineup. Irvine-based owner of El Torito, Carrows, Coco’s chains will have 680 units.
Restaurant Enterprises Group, which operates the El Torito, Coco’s and Carrows restaurant chains, revealed details in a recent Securities and Exchange Commission filing of who will run the company after it completes a planned reorganization.
Jack W. Goodall, president of Foodmaker Corp. in San Diego, will become chairman, president and chief executive. He will replace Norman N. Habermann, who has been REG’s president and CEO since 1986.
Details of its realignment and proposed management changes were included in a Nov. 1 SEC filing made in connection with a coming securities offering.
The restructured company will have 680 full-service restaurants, according to the filing, and $1.1 billion in annual revenue. As part of its regrouping, REG will pay $270 million to acquire the Chi-Chi’s Mexican-style restaurant chain from Foodmaker, which also owns the Jack-in-the-Box fast-food chain.
The acquisition of Chi-Chi’s, with 235 locations, will make REG the nation’s largest operator of sit-down Mexican-style restaurants. REG will convert a dozen Midwestern El Toritos into Chi-Chi’s but, according to the filing, doesn’t plan to combine the two chains under one name.
REG’s SEC filing provides details about a previously announced reorganization plan that would free the Irvine-based company from remnants of $737 million in debt accumulated in 1986, when a group of former W.R. Grace managers acquired Grace’s restaurant business.
REG is profitable from operations, its executives have said, but the company has been unable to continue making debt payments.
Foodmaker, Green Equity Investors and New York-based Apollo Advisors will make a combined $160-million equity investment in REG. Foodmaker and Apollo will take a 40.6% stake each, while Green Equity Investors will hold 18.8%.
As part of its plan, REG will issue $425 million in senior notes, complete a $150-million revolving credit arrangement and submit a so-called prepackaged bankruptcy plan that will be supported by its creditors.
REG will use cash from the recapitalization to modernize restaurants that were last refurbished in the 1980s. And it plans to expand aggressively by adding as many as 30 family-style and 20 Mexican-style restaurants each year.
REG will also convert its 29 remaining Bob’s Big Boy and Allie’s locations to the more popular Coco’s and Carrows restaurants. The company previously said it would sell or close more than 100 unprofitable locations.
Foodmaker executives will play a major role at the new REG, but not all top managers will depart after the realignment is completed.
Though Habermann, 60, will leave REG, Executive Vice President Barry E. Krantz and Chief Financial Officer Mike Casey will stay.
El Torito President Don M. McComas and REG Dinnerhouse Group President Kenneth L. Harris will be replaced by Foodmaker executives Joseph P. Micatrotto and Kevin S. Relyea.
Micatrotto, who joined Chi-Chi’s 10 years ago, has been president of the Louisville, Ky.-based chain since 1992. Relyea has been a Jack-in-the-Box vice president since 1988.
Restaurant Group Reorders
Here is how Restaurant Enterprises Group, owner of El Torito, Coco’s and several other restaurant chains, plans to realign:
In
* Jack W. Goodall, chairman/CEO and president
* Barry E. Krantz, executive vice president
* Mike Casey, CFO
Out
* Norman N. Habermann, former REG president and CEO
* Don M. McComas, former El Torito president
* Kenneth L. Harris, former Dinnerhouse Group president
New Owners
REG was formerly 100% owned by W.R. Grace & Co. of Boca Raton, Fla. New ownership will be divided three ways:
Apollo Advisors, Purchase, N.Y.: 40.6%
Foodmaker Inc., San Diego: 40.6%
Green Equity Investors, Los Angeles: 18.8%
Source: Restaurant Enterprises Group; Researched by JANICE L. JONES / Los Angeles Times
