Case Studies

Big Buck Brewery



Background:

Big Buck Brewery  started in the mid 1990’s in Gaylord, Michigan. It grew over an eight  year life to encompass four units. Gaylord Michigan, Grand Rapids Michigan, Auburn Hills Michigan and Grapevine Texas. In addition, there was one store under development at the Grand ‘ol Opry in Tennessee. By many measures the company was poised for additional growth. But, these were the go-go days of the dot com boom, and when that boom turned to bust, Big Buck Started to struggle. Their Stores were very large and expensive to heat and cool. In addition, they were set on high profile pieces of real estate. The company realized it was going to have to do something radical if it was going to survive.

The Issue:

Big Buck closed their Grand Rapids Store and entered Chapter 11 bankruptcy. At this time they entered into litigation to resolve several issues related to the lease of the property in Auburn Hills. The first issue was whether The lease was actually a financing instrument. The second was what the value of the property was.

 Resolution:

Griffin Properties stepped in to help resolve the issue of lease value for the judge in this case. We provided expert witness testimony to the court as to the market conditions, value of the property and viability of the operating entity as set up at the time. Griffin properties played an important role in a confusing case, and helped the judge come to a better understanding of the situation.


Cooker Restaurants



Background:

The following was an excerpt from a report published in the Nations Restaurant News on May 10th 2004:

“NASHVILLE, TENN. -- Cooker Restaurant Corp., in business since 1984 and once comprising 67 casual-dining branches in the Midwest, has ceased operations after attempts to raise capital and reorganize failed.

Abruptly leaving some 1,500 employees without jobs, Cooker's board of directors voted not to reopen the chain's remaining 20 restaurants--in Ohio, Tennessee and Michigan--after the close of business April 27.

That decision followed "the final 'No'" from numerous prospective sources of operating funds at investment groups and financial institutions, according to Cooker spokesman David McKenzie of McKenzie Advertising.”

What the article does not say is that when the board of Cooker shut the operations, the just walked away from what remained of the business and “let the chips fall where they may”. The restaurants were left as they were with food in the refrigerators, and the tables set for the next day’s business. Employees arrived to notices on the door.

 The Issue:

Majority lender Bank of America and other minority lenders ended up with 20 closed restaurants, and very little in the way of information as to the value of the properties, what the local market situation was and how to best market the properties. In addition, the restaurants were located in three different states with three different procedures for foreclosing on the abandoned real estate.

Resolution:

Griffin Properties partnered with Cook Properties of Nashville Tennessee and JJ Herman and Associates of Cleveland Ohio to provide the lender with the necessary local representation in all markets where the property was located. Griffin Properties worked with the local authorities though the foreclosure process, and oversaw local regional and National marketing of the properties. In addition to the properties, Griffin ensured that the liquor licenses were handled in the correct manner to preserve the Banks interest in these valuable assets. All of the Michigan properties were eventually sold by Griffin Properties.


JB’s Brighton House



Background:

JB (Jim Bugaski) of JB’s Brighton House in Brighton Michigan had owned his restaurant for over 20 years. He had not built the building himself, but he had run it for a long time. He had brought his daughters through their teenage years in the business, but each in her turn had said “Dad I don’t want the business”. Jim’s wife was a teacher in the local school district, and now that they were empty nesters they had decided to sell the business and retire.

 Issue:

The first issue was that Jim did not want his employees or customers to know about the sale. As with many sellers of restaurants, he knew that the rumors and press can kill a restaurant business if it becomes public knowledge. 

Secondly, Jim needed to get as much money out of the business as he could. After all, he was retiring, and they needed all the money they could get.


 Resolution:

JB had tried for about a year to get his business sold with another commercial broker. He had also tried to find a buyer within his own network, but to no avail. Eventually, he had called Griffin Properties. Griffin immediately analyzed the property and the business as to the value, and established the marketing price. (Although the previous broker had been quite close in his price, his marketing had not been effective). Griffin Properties then commenced our Confidential Restaurant Marketing Program. Griffin properties produced several prospects for the property, and had a signed deal within 60 days of embarking on the marketing. Griffin Properties then worked with the buyer and seller to structure the financing, prepare for the closing and ensure a smooth due diligence. The closing of the transaction was handled at Metropolitan Title Company in Brighton. The buyers of the restaurant (now known as The Brighton House)  are still there and prospering after five years, and the Bugaski’s never looked back from their retirement.

DILIGENT  |  FOCUSED  |  CREATIVE