The drama at bankrupt restaurant operator Craftworks Restaurant & Breweries continues thanks to the unendurable strains brought on by the necessity to close all locations and lay-off all employees. The company did finally manage to cobble together a tiny $4mn Debtor-In-Possession credit facility that does not even have the ability to pay rents.
“The DIP loan from Fortress Credit Co. LLC will take the company through May 11 and will fund employees’ wages, benefits, and $1 million in health insurance claims. The budget doesn’t include rent amounting to $2.7 million per month on shuttered restaurants, CraftWorks’ attorney, Peter A. Siddiqui of Katten Muchin Rosenman LLP, told the court at a telephonic hearing Wednesday“.
This suggests to the BDC Credit Reporter that the subordinated debt held by the two BDCs with exposure: FS-KKR Capital (FSK) and non-listed FSIC II, will be fully written off.
That means the realized loss will be ($13.4mn), with FSK with a slightly larger portion of the total. All the debt was valued at $10.2mn at 12/31/2019 so that will represent a telling amount of loss at both mega-funds. Barring any unexpected news or a future post-mortem this might be the last time we cover the company. For our two prior articles, click here.