Oceanaire filed for Chapter 11 bankruptcy reorganization in July, one of scores of restaurant chains felled by a recession that bit deep into consumers' discretionary spending. Oceanaire closed four restaurants, but its other 12 outlets remained open, as is custom in Chapter 11, while the company looked for financial relief.
That relief is expected to come in a $24 million deal with Landry's, a publicly traded company with a stable of over 20 restaurant brands, including Rainforest Cafe, a concept also born in Minnesota. The deal needs federal bankruptcy court approval, which could come as early as next week.
The sale would provide $6.6 million for Oceanaire's creditors, while Landry's would assume about $17 million in Oceanaire debt, said Terry Ryan, Oceanaire's chief executive.
Oceanaire started as a single Minneapolis outlet in 1998. It was part of Parasole Restaurant Holdings -- progenitor of such other well-known Twin Cities restaurant concepts as Manny's Steakhouse and Chino Latino -- until it was spun off in 2001.
Oceanaire's majority owner has been New York-based Clarion Capital Partners, though it's now poised to lose its equity, Ryan said, a common occurrence in a Chapter 11 bankruptcy.
Oceanaire has been one of the Twin Cities' most successful restaurant exports in recent years. The company still operates in nine states, according to its website. The restaurants are built to feel like great seafood supper clubs of the 1930s and 1940s.
"It's a very well-operated business that got caught in some unfortunate leases and some bad economic times," said Tilman Fertitta, Landry's chief executive. "We love the fresh seafood aspect. We feel it fits in with our restaurants."
Landry's operates 174 restaurants nationwide, including 75 in Texas, and many of its holdings feature seafood.
Don't expect Landry's to mess with Oceanaire's basic concept, Fertitta said. "There will not be any changes of any substance at the restaurant level."
He added that Landry's will continue expanding Oceanaire, pointing to its growth track record with Rainforest Cafe, which it bought in 2000. Fertitta said Landry's has opened about one new Rainforest outlet every year since then, and is currently operating about 25 of them, including one in the Mall of America.
In 2006, Landry's bought 80 percent of T-Rex, a dinosaur-themed restaurant concept developed by Steve Schussler, who also created Rainforest Cafe.
By MIKE HUGHLETT, Star Tribune