Yardbird Group - Chapter 11 Case Summary
Yardbird Group filed for Chapter 11 on September 21, 2026 following debt-funded expansion, lasting COVID-19 effects, and divergent location performance that forced three restaurant closures, as well as a default and lender lawsuit over the matured CNB Main Street loan, on which approximately $8.4 million remains outstanding, and are pursuing a going-concern sale of substantially all assets to a credit-bidding stalking horse affiliate of their first-lien lenders backed by a $5.4 million DIP facility from those same lenders.
Business Description
Yardbird Group LLC ("Yardbird Group") and its affiliated debtors Yardbird Beverly Hills, LLC ("YB Beverly Hills"), Yardbird DC, LLC ("YB DC"), Yardbird Chicago, LLC ("YB Chicago"), Yardbird Denver LLC ("YB Denver"), YB Las Vegas, LLC ("YB Las Vegas"), The Bird Singapore LLC ("YB Singapore"), Southern Operations, LLC ("Southern Operations"), Yardbird DFW LLC ("YB DFW"), Yardbird DFW Management LLC ("DFW Management"), and Yardbird DFW Concession LLC ("DFW Concession," and collectively, the "Debtors" or the "Company") own and operate "Yardbird Southern Table & Bar," a polished casual dining concept offering a modern take on traditional Southern American cuisine.
Beyond fried chicken, the menu extends to weekend brunch, chef-curated bourbon dinners, a mixology program, and an extensive wine list, served in an open format anchored by floor-to-ceiling windows and open kitchens. The menu balances American Southern classics with lighter offerings to appeal to diverging customer preferences.
Corporate History
A group of restaurant entrepreneurs (the "Founders") founded what would become the Company's business in 2011. Under the Founders' leadership, the Company opened a Yardbird restaurant in Miami Beach, Florida that year ("Yardbird Miami") and one licensed location in Las Vegas, Nevada ("Yardbird Vegas") in 2015. The Debtor entities were generally formed as Yardbird restaurant locations started to open, each associated with a different restaurant.
In 2017, to combine and expand the existing businesses, Yardbird Group was formed and a private equity sponsor (the "Sponsor") invested in the Company, holding minority control at the outset. The Company then opened five additional owned and operated locations by 2023 — Los Angeles, California ("Yardbird LA"); Dallas, Texas ("Yardbird Dallas"); Washington, D.C. ("Yardbird DC"); Chicago, Illinois ("Yardbird Chicago"); and Denver, Colorado ("Yardbird Denver") — plus one additional licensed location in Singapore ("Yardbird Singapore"), generally entering into leases and building out each space to align with the Yardbird brand. In 2025, the Sponsor and the Founders parted ways, leaving the Sponsor as the 100% owner of Yardbird Group.
Yardbird Group, a Delaware limited liability company, owns 100% of each of the other Debtor entities except DFW Concession, which is wholly owned by DFW Management.
Operations Overview
The Debtors own and operate three restaurants, in Dallas, Texas; Washington, D.C.; and Chicago, Illinois, and license two locations, in Las Vegas, Nevada and Singapore. Approximately 508 people are employed across the Company-owned and licensed locations. Prior to the Petition Date, the Debtors closed their Los Angeles, California; Denver, Colorado; and Miami, Florida locations.
Alongside sales from daily restaurant operations, event dining and catering represent a significant portion of revenue.
Prepetition Obligations
As of the Petition Date, the Debtors are obligors on approximately $24.8 million of funded debt across three facilities, all secured, and estimate unsecured claims of approximately $24.2 million.
| Funded Debt | Approximate Principal Outstanding |
|---|---|
| Brightwood Loan Facility | $13,324,252.00 |
| CNB Main Street Loan Facility | $8,387,916.71 |
| inKind Obligations | $3,126,442.60 |
| Total Secured Debt Obligations | $24,838,611.31 |
The Brightwood Loan Facility
Yardbird Group, as borrower (the "Prepetition Borrower"), entered into a Credit and Guaranty Agreement dated July 28, 2022, amended April 19, 2024 and again by an Amendment No. 2 and Waiver dated November 14, 2025 (the "Prepetition Credit Agreement"), with the lenders party thereto (the "Prepetition Lenders") and Brightwood Loan Services LLC as administrative and collateral agent (the "Prepetition Agent," and with the Prepetition Lenders, the "Prepetition Secured Parties"). YB DFW, YB DC, YB Chicago, YB Denver, YB Singapore, YB Beverly Hills, and YB Las Vegas are guarantors (the "Guarantors," and with the Prepetition Borrower, the "Credit Parties").
- Size: an initial term loan and delayed draw term loans in an aggregate principal amount of $13 million, with not less than $13.3 million of principal outstanding as of the Petition Date (with accrued and unpaid interest, fees, and other amounts, the "Brightwood Prepetition Obligations").
- Collateral: first-priority liens (the "Prepetition Liens") on substantially all of the Debtors' assets, other than the assets of Southern Operations, where the Prepetition Secured Parties hold a second-priority lien.
- Intercompany subordination: under an Intercompany Subordination Agreement dated July 28, 2022, the Credit Parties, Southern Operations, and non-debtor The Bird Singapore Pte. Ltd. ("The Bird Ltd.," with Southern Operations, the "Non-Credit Parties") subordinated all obligations of any Credit Party owing to a Non-Credit Party on account of loans or advances, for the benefit of the Prepetition Secured Parties.
The CNB Main Street Loan Facility
On or about August 11, 2020, Southern Operations, as borrower, and Yardbird Group, as guarantor, incurred $9.9 million of indebtedness in favor of City National Bank of Florida ("CNB") through the Main Street Loan Facility Program established by the Board of Governors of the Federal Reserve System under Section 13(3) of the Federal Reserve Act (the "CNB Main Street Loan Facility"). An Amendment and Ratification of Loan and Security Agreement dated April 8, 2025 and effective as of August 11, 2024 (with the facility and related documents, the "CNB Main Street Loan Documents") added YB DFW, YB Denver, YB DC, YB Chicago, and YB Beverly Hills as New Guarantors alongside Yardbird Group as Existing Guarantor.
- Collateral: a first-priority security interest in the collateral of Southern Operations, which at this time consists of stored equipment and possibly a liquor license related to the closed Miami location, and a second-priority security interest in the collateral of Yardbird Group, YB DFW, YB DC, YB Chicago, YB Denver, and YB Beverly Hills.
- Amount: approximately $8.4 million outstanding as of the Petition Date.
- Litigation: on or about March 24, 2026, CNB sued Southern Operations, YB Beverly Hills, YB Chicago, YB DC, YB DFW, and YB Denver in the Circuit Court of the 11th Judicial Circuit in and for Miami-Dade County, Florida for breach of contract and enforcement of the CNB Main Street Loan Documents (the "CNB Litigation"), which remained pending as of the Petition Date.
inKind Obligations
On June 27, 2025, Yardbird Group and certain debtor affiliates entered into a Credit Purchase Agreement (the "inKind Agreement") with inKind Cards Inc., inKind Credit Fund LP, and inKind Warehouse Facility, LLC (collectively, "inKind"), under which inKind provided working capital in exchange for credits (the "Credits") that inKind's customers may redeem at the Debtors' restaurants. Approximately $3.1 million remains outstanding as of the Petition Date. inKind filed UCC-1 financing statements against YB DFW, YB DC, YB Chicago, YB Denver, and YB Beverly Hills (the "inKind-Debtors") asserting a perfected lien on their collateral, including accounts receivable, domestic inventory, general intangibles, equipment, promissory notes and instruments, giving inKind a third-priority perfected lien on the inKind-Debtors' Article 9 collateral.
Lien Priority
| Collateral | Priority | Facility |
|---|---|---|
| Substantially all of the respective assets of Yardbird Group, YB DFW, YB DC, YB Chicago, YB Denver, DFW Management, DFW Concession, YB Singapore, YB Beverly Hills, and YB Las Vegas | First | Prepetition Credit Agreement |
| Substantially all of the assets of Southern Operations | First | CNB Main Street Loan Facility |
| Substantially all of the respective assets of Yardbird Group, YB DFW, YB DC, YB Chicago, YB Denver, and YB Beverly Hills | Second | CNB Main Street Loan Facility |
| Substantially all of the respective assets of YB DFW, YB DC, YB Chicago, YB Denver, and YB Beverly Hills | Third | inKind Agreement |
Events Leading to Bankruptcy
The Declaration attributes the Company's financial difficulties, which developed over several years, to a combination of significant expansion-related expenditures, location-specific operating challenges, the lasting effects of the COVID-19 pandemic, and an increasingly burdensome capital structure.
Expansion and the Pandemic
Following the Sponsor's 2017 investment, the Company pursued an expansion strategy that produced additional leases, multiple location buildouts incorporating award-winning architecture and design, and six new restaurant locations across major domestic and international markets, including Los Angeles, Dallas, Washington, D.C., Denver, Chicago, and Singapore. That expansion required substantial capital investment, and over time the Company incurred additional indebtedness, including the facilities described above, to fund the openings and related capital expenditures.
The onset of COVID-19 materially complicated those expansion efforts. Quarantine mandates closed in-store locations, depressed restaurant sales, forced fundamental operational changes including significantly greater reliance on food delivery apps, and altered the demographics of once-growing urban areas, reducing foot traffic and changing expected revenue. The Declaration states that the Debtors' businesses suffered irrecoverable damage from the pandemic.
Divergent Location Performance and Closures
Performance diverged significantly across the Yardbird portfolio over time. Certain locations continued to perform well, while others were adversely affected by circumstances unique to their markets, some attributed to the pandemic, including changes in neighborhood traffic patterns, tourism, convention activity, consumer behavior, and the development of surrounding trade areas. Losses at the underperforming locations pressured liquidity and ultimately required closures alongside turnaround initiatives elsewhere: the Company closed Yardbird Denver in 2025, and Yardbird LA and Yardbird Miami in 2026.
As losses accumulated, the Company implemented location-specific turnaround plans and made changes to its senior management team to focus resources on the stronger portions of the portfolio. It engaged Traverse, LLC ("Traverse") as financial advisor around April 2026 to assist in those efforts. Mounting debt obligations and looming maturity dates arising from the expansion financing persisted, and in consultation with Traverse the Company engaged its lenders, including the Prepetition Secured Parties and CNB, and other stakeholders on potential restructuring alternatives as liquidity became increasingly constrained.
The CNB Default and Litigation
The Company attempted to negotiate a restructuring with CNB concerning the CNB Main Street Loan Facility, which matured on August 11, 2025. Those negotiations were unsuccessful, and the Debtors party to the facility, unable to satisfy their obligations by the maturity date, defaulted under the CNB Main Street Loan Documents. On March 24, 2026, CNB filed a complaint in the Circuit Court of the 11th Judicial Circuit in and for Miami-Dade County, Florida, styled City National Bank of Florida v. Southern Operation, LLC, et al., initiating the CNB Litigation. CNB moved for summary judgment, with the Company's response deadline set for October 1, 2026.
Given increasing debt obligations, the CNB Litigation, and the need for liquidity, the Company expanded its consideration of strategic alternatives and concluded, in consultation with its advisors, that a sale of its assets through a Chapter 11 process would best address its capital structure, maximize the value of the Yardbird brand and its viable locations, and provide a forum for an orderly restructuring of its obligations. The Prepetition Secured Parties, holding a first lien on substantially all assets other than those of Southern Operations, supported a sale transaction and were willing to provide short-term funding.
Chapter 11 Filing
The Debtors filed voluntary Chapter 11 petitions in the U.S. Bankruptcy Court for the District of Delaware on September 21, 2026, seeking to sell substantially all of their assets as a going concern, with a credit-bidding affiliate of their first-lien lenders as stalking horse and a DIP facility from the same lender group.
Governance and Advisors
The Debtors engaged Potter Anderson & Corroon LLP as restructuring counsel on August 3, 2026, after it had become clear that a Chapter 11 filing would likely be needed to complete an in-court sale process, and engaged Soravine Advisors LLC ("Soravine") around the same time to pursue a going-concern sale. On September 1, 2026, Traverse's engagement was expanded to provide a chief restructuring officer and restructuring advisory services, and Albert Altro, a Managing Director of Traverse, was appointed CRO on or around that date. On September 2, 2026, the governing bodies of each Debtor appointed Adam Paul as the sole independent manager (the "Independent Manager") of Yardbird Group to evaluate and recommend strategic and financial alternatives, including a potential refinancing of existing indebtedness, a sale of the Company, a recapitalization with one or more existing lenders, or other alternatives. Kurtzman Carson Consultants LLC dba Verita Global is the proposed claims and noticing agent.
Prepetition Marketing Process
Soravine began marketing all or substantially all of the Debtors' business and assets on August 21, 2026, preparing a teaser, a confidential information memorandum and management presentation, and a proforma net working capital supplement. It contacted over 170 potential buyers spanning restaurant strategic groups and financial/distressed buyers. Twenty-one parties executed non-disclosure agreements ("NDA Parties") and received the confidential information memorandum and management presentation and the working capital supplement; two submitted additional information requests and one requested a call with the CRO. NDA Parties were invited to submit non-binding indications of interest ("IOI") by September 15, 2026, and the Debtors received three IOIs for all or part of the business. The IOIs were significantly below the Company's first lien debt. The Debtors evaluated them on transaction structure, the form and amount of consideration, the assets to be acquired and liabilities assumed, certainty of close, and execution risk, consulting with advisors and key stakeholders before and after submission.
The Stalking Horse APA
The marketing process culminated in an asset purchase agreement (the "Stalking Horse APA") for substantially all of the Debtors' assets with an affiliate of the Prepetition Secured Parties (the "Stalking Horse"), in exchange for a credit bid under section 363(k) of the obligations owed under the DIP Facility and the Prepetition Credit Agreement, plus assumption of certain liabilities. The Stalking Horse APA provides no break-up fee, but seeks approval of an expense reimbursement of up to $275,000 should the Stalking Horse not be the successful bidder. The bid remains subject to higher and/or otherwise better offers through the sale process contemplated by the Bidding Procedures Motion filed with the petitions.
The DIP Facility
Concurrently with the marketing process, the CRO began soliciting debtor-in-possession financing in late July 2026, preparing a teaser and contacting approximately eighteen potential lenders — strategic groups, private equity firms, financial third-party investors, and traditional lending institutions — for a superpriority priming facility. Because substantially all assets, including cash on hand, are subject to the Prepetition Liens and constitute cash collateral, the CRO also inquired whether any third party would lend on an unsecured, junior priority, or priming basis. Two interested parties signed confidentiality agreements, and the Debtors ultimately received two term sheets, one from a third party and one from the Prepetition Secured Parties. The Prepetition Secured Parties, in their capacity as lenders under the DIP Facility (the "DIP Secured Parties"), would not consent to being primed, and following arm's-length negotiations the Debtors executed their term sheet (the "DIP Term Sheet").
- Size: senior secured superpriority financing in an aggregate principal amount of $5.4 million (the "DIP Facility").
- New money: $1.8 million of revolving new money credit commitments (the "New Money DIP Loans").
- Roll-up: a roll up of the Brightwood Prepetition Obligations as of the Petition Date at $2.00 of Brightwood Prepetition Obligations for every $1.00 of New Money DIP Loans funded.
- Milestones: the DIP Facility contains case Milestones, negotiated between the DIP Secured Parties and the Debtors, that are a condition to the DIP Secured Parties' provision of the facility.
- Alternatives: the Declaration states that no alternative financing is available on better and executable terms, and that without access to the facility and cash collateral the Debtors would be unable to fund payroll, procure goods and services from vendors, run the sale process, or administer the cases.
Illustrative Case Timeline
- September 21, 2026 – Petition Date; Bidding Procedures Motion filed.
- October 8, 2026 – Proposed bid procedures hearing.
- October 27, 2026, at 4:00 p.m. (ET) – Bid deadline.
- November 2, 2026, at 10:00 a.m. (ET) – Proposed auction date.
- November 9, 2026 – Proposed sale hearing.
- November 30, 2026 – Deadline to consummate approved sale.
All dates are subject to Court approval and availability.
First Day Relief
The Debtors filed first day motions seeking, among other things, authority to obtain postpetition financing and use cash collateral with adequate protection to the Prepetition Secured Parties, joint administration, continued operation of the cash management system and intercompany transactions, payment of prepetition wages, compensation, employee benefits and other employee obligations, payment of certain prepetition claims of critical vendors, 503(b)(9) claimants, and PACA/PASA claimants, continuation of customer programs, maintenance of existing insurance policies, payment of certain prepetition taxes and fees, adequate assurance to utility companies, and redaction of personally identifying information in the consolidated creditor list.