Elementary school student Eric Theodore Cartman described his experience at Casa Bonita as “totally” worth making an entire town panic, losing all his friends and going to juvenile hall for a week in an episode of the TV show “South Park.” For more than four decades, Casa Bonita, located in Denver, has been an iconic Colorado “eatertainment” establishment offering dining and entertainment, including cliff-diving shows, live music and an amusement arcade. Now stricken by bankruptcy and its future uncertain, Casa Bonita could very well find a home with the creators of “South Park.”
Like many restaurants, the COVID-19 global pandemic devastated Casa Bonita when government mandates forced it, along with other restaurants, to be temporarily closed. When Casa Bonita was allowed to reopen its doors, it was only able to operate at 2-18% of its seating capacity due to various state and county pandemic restrictions. Worse, the restrictions prevented Casa Bonita from offering entertainment, a signature — and vital — element of its business model.
Despite receiving a Paycheck Protection Program loan of more than $1 million, Casa Bonita remained crippled by the pandemic, which devasted the restaurant’s revenue stream that was dependent on operations. As a result, Summit Family Restaurants, Inc., d/b/a Casa Bonita, filed a subchapter V petition on April 6, 2021.
According to the petition, the debtor’s sole source of revenue is generated from the operation of Casa Bonita, and the impact of COVID-19 caused Casa Bonita to fall behind on its rent. At the time of filing, Casa Bonita reported approximately $3.6 million in assets, consisting mainly of the equipment and inventory necessary for the operation of the establishment, as well as approximately $4.4 million in liabilities. There are approximately $2.3 million in unsecured creditor claims.
The debtor filed its original plan of reorganization on June 21, 2021, which proposed to pay all creditors in full via the continued operation of the iconic restaurant. Much like Butters’s perseverance to rebuild society (another character in the show), Casa Bonita sought to reorganize. Due to continued uncertainty over the course of the COVID-19 pandemic, the company’s plan accounted for the possibility that Casa Bonita may again be forced to close in the future due to government restrictions. If this were to occur, payments to creditors under the plan would be suspended while Casa Bonita is closed, and the duration of payments would be extended by a corresponding time period upon the reopening of Casa Bonita.
However, in what could be a boon to creditors, last month the debtor notified the court of an agreement in principle for the sale of Casa Bonita to an entity that is owned by none other than the creators of the television show “South Park,” Matt Stone and Trey Parker. The sale motion was filed on Sept. 27, 2021, and indicates that Beautiful OPCO, LLC entered into a sale agreement to purchase Casa Bonita for $3.1 million. The representative that executed the sale agreement on behalf of the buyer is Keith Pizzi, the CFO of Park County, LLC, a company owned by Parker and Stone. Subject to the approval of the bankruptcy court, the sale agreement involves the assumption of the lease and satisfaction of all claims, with the caveat that it will be a private sale with no competitive bidding. The sale motion contemplates that the sales price is sufficient to “pay all claims in the case with room to spare.”
The debtor filed an Amended Plan of Liquidation Dated October 6, 2021 For Small Business Under Chapter 11, Subchapter V that incorporates the new sale. The amended plan details the satisfaction of the claims based on the pending sale motion and points out that if the contingent and disputed claims are allowed, the total would be less than the purchase price of $3.1 million.
Then on Oct. 18, 2021, Save Casa Bonita, LLC filed an objection to the sale to Stone and Parker and offered to purchase Casa Bonita for $3.5 million, under the same terms and conditions, creating a potential bidding war for the asset — not too dissimilar from Eric Cartman’s efforts to secure the last seat to Casa Bonita in the titular “South Park” episode.
However, potentially complicating any sale, Casa Bonita Denver, Inc. (CBDI), a separate entity, owns the intellectual property of Casa Bonita. And according to the sale motion, a separate asset-purchase agreement for the intellectual property was entered into between CBDI and The Beautiful House, LLC, an entity that is related to the buyer but is not subject to the bankruptcy court’s jurisdiction.
Although Stone and Parker’s quest to save their beloved Casa Bonita may seem out of the ordinary, if successful it may provide a blueprint for other high-profile show-runners to take advantage of the public interest and goodwill in brands generated by their shows.
Regardless of who ultimately is deemed the ultimate purchaser, show character Kyle Broflovsky may yet be able to celebrate his birthday with his mom and three of his friends at Casa Bonita.