Arizona-based Kona Grill Inc. and its subsidiaries — including Kona Grill Puerto Rico Inc. — have filed a Chapter 11 petition in the U.S. Bankruptcy Court for the District of Delaware, to facilitate its previously announced sale process.
Kona Grill has one restaurant in Puerto Rico, located at The Mall of San Juan. It opened in 2015, as this media outlet reported.
Chapter 11 provides for “formal and well-defined sale mechanics that are attractive to buyers, as well as tools that will allow the company to reduce or eliminate various expenses,” CEO Jonathan Tibus said in a letter to employees.
Kona Grill Inc.’s 27 restaurants will remain open and operating as usual during the Ch. 11 process and “customers can expect to continue to enjoy the global food, friendly people, and unique cultures for which the company is known,” it said in a statement.
KeyBank National Association and Zions First National Bank have agreed to provide $6 million in Debtor-in-Possession financing to ensure the bankruptcy and sale process, according to a press release.
“The support from KeyBank and Zions will help ensure that this process is seamless for our guests, employees, and vendors”, said Tibus. “We’re looking forward to completing this transaction quickly and returning Kona back to growth.”
In the letter to employees, Tibus said in March, the company engaged Piper Jaffray & Co. to help evaluate strategic options, including a possible sale of the company.
“Since then, Piper Jaffray has engaged in a thorough marketing process and identified several potential buyers,” he said. “It is our expectation that the sale will be completed by late July or early August.”
“In the meantime, our operations will continue as usual, and you should see no impact on your day-to-day responsibilities,” he told employees, adding there is no expectation Kona Grill will go out of business.