Scottsdale-based Z’Tejas Inc. took its popular southwestern-style restaurant chain to the bankruptcy court this week in hopes of a buyout.
Nearly 20 separate entities related to the Z’Tejas Southwestern Grill eateries filed for Chapter 11 bankruptcy protection Wednesday in the U.S. Bankruptcy Court in Phoenix. The filings also include the Taco Guild restaurant in central Phoenix, which Z’Tejas opened in 2013 inside an old church at 7th Street and Osborn Road.
Steven Micheletti, president and CEO of Z’Tejas, said in court papers that the company has been challenged by industry competition, consumer spending that still is recovering and an over-leveraged balance sheet.
The company's website shows it operates five Z’Tejas locations in the Valley and four others in California and Texas. It hopes to keep those doors open through a buyout, which is set to take place at an auction that’s scheduled for mid-September, records show.
A company called Cornbread Ventures LP has made a stalking horse bid for the chain, which is when a bankrupt company chooses from a pool of bidders who the first bid, or stalking horse, will be. The stalking horse sets the starting price for bidding in the court sale process.
