Los Angeles-based Latin Intellectual Properties Inc. has agreed to purchase the chain, having inked a deal with Prandium's wholly owned subsidiary, FRI-MRD Corp. According to the terms of the transaction, Prandium will receive cash proceeds of $15 million, subject to certain post-closing adjustments based on a closing balance sheet. The terms also state that $500,000 will be held in escrow for one year, in connection with potential post-closing obligations.
The decision to sell Hamburger Hamlet was made as part of the company's reorganization plan, which Prandium unveiled last June in an attempt to remedy its financial troubles. The company, which is still being reorganized, also cut more than 40 jobs as part of the plan.
The proceeds from the Hamburger Hamlet sale will be used to repay indebtedness related to the FRI-MRD Note claims involved in the capital reorganization. The transaction is expected to close after the reorganization has been completed, but no earlier than July 24, 2002.
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