Papa Gino’s Parent Firm Files for Bankruptcy
The parent company of Dedham-based Papa Gino’s Pizzeria and D’Angelo Grilled Sandwiches announced Monday it has reached an agreement in principle to sell its fast-food chains to a portfolio company and filed for Chapter 11 bankruptcy protection.
The announcement comes after PGHC Holdings, Inc., stunned employees and customers alike Sunday by abruptly shuttering 95 restaurants without a public explanation.
The closures include Papa Gino’s restaurants in Fitchburg, Lowell, Westford, Bedford, Methuen and Nashua, N.H.
D’Angelo closed storefronts in Chelmsford, Westford, Bedford, Burlington and Derry, N.H. Two of the sandwich shop’s locations in Nashua, N.H., and two in Salem, N.H., also closed.
PGHC said while it regrets the closings they were a necessary step toward addressing the company’s debt structure.
PGHC hopes to move “certain team members” from closed restaurants to those which continue to operate throughout New England: 100 Papa Gino’s pizzerias and 78 D’Angelo sandwich shops.
The proposed sale to Wynnchurch Capital would require court approval; however, PGHC Holdings, Inc., said in a statement it will solicit competing offers “to maximize the ultimate value of the sale, for both the company and its stakeholders.”
Wynnchurch Capital is a middle-market private equity investment firm headquartered in Chicago with $2.2 billion of committed capital under management. Its specialties include restructurings.
Corey Wendland, PGHC’s chief financial officer, said, “These were hard decisions, but decisions we believe were absolutely necessary to allow Papa Gino’s and D’Angelo Grilled Sandwiches to continue serving New England now and for years to come.”
Wendland stressed that PGHC “will continue its long tradition of hosting birthday parties, team celebrations and other neighborhood events.”
According to the company, the closures followed a “careful review and analysis” of under-performing restaurants.
“The company regrets having to close these restaurants but believes focusing resources on a core of best-performing restaurants is the responsible approach,” the press release said.
Regionally, Papa Gino’s locations in Chelmsford, Tewksbury, Leominster, Gardner, Burlington and Derry, Hudson, and Salem, N.H. are listed as open on the company’s website. According to the website, D’Angelo’s stores are still operating across New England including in Fitchburg, Gardner, Leominster.
Papa Gino’s was founded in East Boston in 1961. It is the official pizza of the New England Patriots.
D’Angelo’s, formerly Ma Riva’s Sub Shop, has been in operation since 1967.
Monday’s bankruptcy filing will enable PGHC to maintain normal business operations, while improving liquidity as it pursues the sale.