Jolly Roger and Irvine, Calif.-based Monterey Bay Canners Inc., which filed for bankruptcy protection last April, will sell the local Yum Yum Tree, Monterey Bay Canners and Islander Coffee House restaurants to Nevada-based TP Acquisitions Inc. TP Acquisitions will pay $3.3 million for the 11 Hawaii restaurants, a local bakery and several California eateries.
In a separate deal, Jolly Roger also agreed to sell its local franchise of eight Sizzler restaurants to a Honolulu couple, Frank and Betty Sallee, for $1.13 million.
The transactions require approval from the federal Bankruptcy Court in Santa Ana, Calif., which will hold a hearing Feb. 10.
Pam Karger, attorney for Jolly Roger, said the buyers plan to retain most of Jolly Roger's 1,050 local employees and refurbish some of the restaurants.
Jolly Roger and its affiliated companies at one time owned or operated 28 restaurants statewide. But the companies closed several locations when they filed for Chapter 11 bankruptcy protection in April.
According to Karger, Jolly Roger had been the local franchisee for the Sizzler restaurant chain for about 20 years. She noted that the company acquired the local franchise from the Sallees, who continued to sublease many of the Sizzlers to Jolly Roger.
The Sallees are creditors of Jolly Roger. "We're going to straighten them out and put them in the saddle," Frank Sallee said of the Sizzler restaurants.
The deals ended several months of negotiations with dozens of prospective buyers. Jolly Roger and a related company Trans/Pacific Restaurants Inc. last year hired Los Angeles investment banker Houlihan, Lokey, Howard & Zukin to market the local eateries.
Houlihan Lokey, creditors and the Jolly Roger companies examined buyout proposals from 31 prospects before settling on bids by TP Acquisitions and the Sallees, court documents show.
A group led by Jolly Roger president Ronald Higgins acquired the corporations in a leveraged buyout just as Hawaii's economy began to falter in 1990.