Tex-Mex restaurant chain On The Border Mexican Grill & Cantina is closer to getting a new owner after a U.S. bankruptcy judge approved bid procedures and deadlines ahead of a scheduled auction next month.
The judge also granted an order for On The Border to reject more than 70 restaurant leases that the company told the court it vacated because of its dire financial situation before it filed for Chapter 11 bankruptcy protection last month.
The company said it spent about $25.3 million in lease obligations in 2024 with nearly $11.9 million related to underperforming stores.
On The Border "accelerated their lease rationalization process" in connection with its "broader restructuring" of the business after dealing with changing dining habits, inflation, high food and labor costs and high rents, the company told the court. The lease rejection plan is centered on value maximization, the company said, with the rejected leases having otherwise continued to drive losses.
Judge Sage Sigler in the U.S. Bankruptcy Court for the Northern District of Georgia in Atlanta has approved an order outlining bid procedures for On The Border and its 60 operational locations. OTB Lender LLC, an affiliate of Pappas Restaurants, lent On The Border millions of dollars in financing and is On The Border's stalking-horse bidder, meaning it provided the starting bid for the restaurant chain.
Pappas Restaurants, a Houston-based, family-run restaurant chain with brands such as Pappas Bros. Steakhouse, Pappadeaux Seafood Kitchen and Little's Oyster Bar, made a bid for On The Border and its assets but the details of it were not disclosed.
Over the years, the restaurant chain's owners have included Brinker International, Golden Gate Capital and Border Holdings, an affiliate of the Atlanta-based private equity firm Argonne Capital Group. The chain's parent company now is OTB Holding.
On The Border includes 60 operational locations that are expected to sell to the highest and best bidder during the Chapter 11 bankruptcy proceedings. The bid deadline is 4 p.m. EST on May 1, with the auction scheduled for 10 a.m. EST on May 6. The bankruptcy court has scheduled a sale hearing to confirm the winning bid at 10 a.m. EST on May 16.
The 73 restaurants where On The Border is rejecting its leases include the following locations:
Arizona: 5005 E. Ray Road in Phoenix; 5205 E. Broadway Blvd. in Tucson; 7873 W. Bell Road in Peoria; 1710 S. Power Road in Mesa.
Arkansas: 6000 Warden Road in Sherwood; 2324 Red Wolf Blvd. in Jonesboro.
Colorado: 14255 W. Colfax in Golden; 7695 N. Academy Blvd. in Colorado Springs; 6015 Sky Pond Drive in Loveland.
Connecticut: 220 Indian River Road in Orange.
Florida: 12295 SW 88th St. in Miami; 3250 Rolling Oaks Blvd. in Kissimmee; 12517 State Road 535 in Orlando; 15301 NW 67th Ave. in Miami Lakes.
Georgia: 3640 Atlanta Highway in Athens; 10575 Davis Drive in Alpharetta; 3206 Buford Drive in Buford; 2275 Pleasant Hill Road in Duluth; 1 Buckhead Loop NE in Atlanta; 790 Cobb Place Blvd. in Kennesaw.
Illinois: 1915 Glacier Park Ave. in Naperville; 3050 E. Main St. in St. Charles; 870 N. Meacham Road in Schaumburg; 535 N. Lakeview in Vernon Hills.
Indiana: 6001 E. 86th St. in Indianapolis.
Iowa: 140 S. Jordan Creek Parkway in West Des Moines.
Kansas: 11855 W. 95th St. in Overland Park; 3080 Iowa St. in Lawrence; 5200 W. 119th St. in Leawood.
Maine: 420 Maine Mall Road in South Portland.
Maryland: 3803 Boston St. in Baltimore.
Massachusetts: 19 Commerce Way in Woburn; 33 Border Way in West Springfield.
Michigan: 12383 James St. in Holland; 21091 Haggerty Road in Novi; 3930 Baldwin Road in Auburn Hills; 35613 Warren Road in Westland.
Missouri: 3030 S. Rangeline Road in Joplin; 1800 NW Chipman Road in Lees Summit; 19921 E. Jackson Drive in Independence; 8340 NW Roanridge Road in Kansas City.
Mississippi: 6572 Airways Road in Southaven.
New Jersey: 1738 US-46 in Woodland Park; 1201 Hooper Ave. Suite A20 in Toms River.
New York: 45 Middle Ave. in Holtsville; 200 Broadway Mall in Hicksville.
North Carolina: 1102 Walnut St. in Cary; 10710 Providence Road in Charlotte; 2409 E. Franklin Blvd. in Gastonia; 1128 Military Cutoff Road in Wilmington.
Ohio: 4175 Morse Crossing in Columbus.
Oklahoma: 433 Planet Court in Midwest City; 544 Interstate 240 in Oklahoma City; 8702 E. 71st St. in Tulsa; 3500 NW Expressway in Oklahoma City.
Pennsylvania: 796 Woodland Drive in Wyomissing; 102 Bartlett Ave. in Exton.
Texas: 2011 E. Copeland Road in Arlington; 4855 Belt Line Road in Addison; 1890 S. Stemmons Freeway in Lewisville; 3130 Knox St. in Dallas; 709 Texas Ave. in College Station; 500 State Highway 121 in Plano; 890 E. Highway 114 in Roanoke; 4306 W. Loop 250 N in Midland; 1505 N. Central Expressway in Plano; 213 N. Central Expressway in Allen; 6709 Slide Road in Lubbock; 5960 W. Parker Road in Plano.
Virginia: 11947U Fair Oaks Mall - G213 in Fairfax; 11880 Spectrum Center in Reston; 2651 Prince William Parkway in Woodbridge.