The Carlsbad-based chain’s lender, which was the only bidder, agreed to a purchase price of $40 million.
Carlsbad-based Rubio’s Coastal Grill, which just two months ago filed for bankruptcy protection after shuttering dozens of its restaurants, has found a buyer.
An affiliate of TREW Capital Management, which was Rubio’s lender, has agreed to purchase the decades-old taco chain for $40 million.
The firm, run by Jeff Crivello, the former CEO of Famous Dave’s, effectively used a portion of its outstanding debt to acquire Rubio’s. Because there were no other bidders, a planned auction was no longer necessary.
Founded 40 years ago, Rubio’s is a fraction of what it once was. Just days before filing for Chapter 11 bankruptcy, the company’s owner, Mill Road Capital, abruptly closed 48 of its restaurants, 13 of them across San Diego County. The remaining restaurants, most of them in California, number 86, less than half of the company’s once nearly 200 restaurants.
With the sale, which still must be formally approved by the bankruptcy court next week, the familiar Rubio’s restaurants will continue to operate, as they are now, but it remains a question as to how many will remain, said San Diego restaurant analyst John Gordon. Much of it will depend on customers’ willingness to continue patronizing the chain, especially in San Diego, he said.
“There is certainly some residual pride of Rubio’s in San Diego, but the company has lost so much money and now has to switch owners so that means there is a strand of uncertainty about Rubio’s in San Diego because they’ve already been through two bankruptcies,” Gordon said. “Hopefully, the sales trends in San Diego are higher than at other stores. but we don’t know what will happen or what will even happen to the Carlsbad corporate office.
“Rubio’s could have a sales challenge due to the news of the previous closings and the Chapter 11 filing because potential guests will assume they are closed.”
The chain previously filed for bankruptcy in 2020. At the time, then-Chief Executive Marc Simon said the filing was largely triggered by the COVID-19 pandemic.
Gordon said he expects the chain will need an infusion of money at some point. According to an article in trade publication Restaurant Business, Crivello had a reputation, when he was heading Famous Dave’s, of aggressively going after restaurant chains he could snap up at budget prices.
At the time of its Chapter 11 filing, Rubio’s said its assets were $10 million to $15 million, while liabilities were $100 million to $500 million. The number of creditors could be as high as 25,000, the company said in its filing.