Prandium’s Hamburger Hamlet Deal Collapses

Restaurant owner Prandium Inc., edging closer to bankruptcy, said Friday that its deal to sell 14 Hamburger Hamlet restaurants has fallen through.

The Irvine company, which has piled up huge debts and defaulted on several interest payments, warned that it may be forced into bankruptcy proceedings from which it might not emerge if it can’t find a buyer. Prandium has said it would use proceeds from a sale to pay some bondholders.

Prandium, which also owns the Koo Koo Roo and Chi-Chi’s chains, said its deal to sell Hamburger Hamlet to Beverly Hills-based Othello Holding Corp. for $16.1million in cash was terminated after the purchaser failed to meet certain terms. Prandium spokesman Robert L. Carl would not elaborate. Othello officials could not be reached.

Prandium remains confident it will sell Hamburger Hamlet, which has been on the block since May, Carl said. Othello remains one of the prospective buyers, Prandium said in its release.

The company has defaulted on 12 interest payments and owed bondholders nearly $235 million as of Sept. 30, Carl said.

If it can sell Hamburger Hamlet and work out more financing, Prandium would file voluntary bankruptcy that would allow it to reorganize.

Prandium shares, which trade over-the-counter, closed Friday at about 1 cent, virtually unchanged.