Papa Gino’s Inc. filed for chapter 11 bankruptcy protection Monday with plans to sell itself for $20 million after abruptly closing more than 90 of its pizza and sandwich stores, WSJ Pro Bankruptcy reported. Dedham, Mass.-based Papa Gino’s said it has reached an agreement in principle to sell the company to Wynnchurch Capital, a private-equity firm. Wynnchurch bought about $52 million of the company’s top-ranking loans this summer, after efforts to find a buyer fell through, court papers say. According to court papers, Wynnchurch is offering to “credit-bid” $20 million of the debt for the company and take on some other liabilities. Unless it is improved at a bankruptcy auction, the offer portends a dismal result for Papa Gino’s creditors, including Hartford Life Insurance Co. and Brookside Mezzanine Fund II LP, which are owed about $40 million in the aggregate. Trade debt stands at about $9 million, but that figure will rise as landlords submit claims for rejected leases.
