Out West Restaurant Group filed for bankruptcy on Monday and Bloomin' Brands agreed to buy substantially all of its assets through a court-supervised sale. The deal centers on 61 Outback restaurants in the western U.S., where the franchisee plans to keep operating while the case moves through court.
Bloomin' Brands signed the asset purchase agreement on Sunday with a starting price of $26.3 million, subject to adjustments and the assumption of certain liabilities. If the transaction closes and wins court approval, Bloomin' Brands would become the stalking horse bidder, setting the opening offer for the sale process.
That matters because the filing and the deal landed together. Out West, formally known as Cerca Trova Restaurant Group Holdings, is an independently owned franchisee of Outback Steakhouse, and the bankruptcy places its restaurants, debts and creditor claims inside a Chapter 11 case in the U.S. Bankruptcy Court for the District of Delaware. Bloomin' Brands said the filing does not immediately affect restaurant operations, but the court process still determines who controls the assets and on what terms.
The money trail shows why the case is under pressure. Bloomin' Brands agreed to provide up to $5.5 million in interest-free financing to help Out West cover operating expenses, professional costs and administrative expenses during the bankruptcy proceedings. Out West also plans to keep paying newly incurred franchise fees and royalties owed to Bloomin' Brands, along with rent under leases guaranteed by the company. In December 2023, Bloomin' Brands, the franchisee and its lenders agreed to delay payments and hold off on enforcing certain rights tied to earlier defaults, and that arrangement also said a bankruptcy filing would trigger repayment of amounts owed to Bloomin' Brands and substantial sums owed to lenders.
The filing put those repayment provisions on hold, but it did not erase the underlying fight over value. Out West has asked the court for permission to pay certain employee, vendor, supplier and other obligations incurred before the petition date, while Bloomin' Brands says securing the restaurants would give it direct operational insight, support future investment through its development initiatives and help limit disruption to guests and employees. The unresolved question is not whether the restaurants keep serving customers now; it is whether this court-run sale ends with Bloomin' Brands taking control, or whether the process draws a better offer before the deal is approved.
