On The Border Mexican Grill & Cantina via Facebook
Houston-based Pappas Restaurants is close to adding another Tex-Mex chain to its portfolio after winning a bankruptcy auction this week to purchase On The Border Mexican Grill & Cantina.
Pappasito’s Cantina is one of multiple restaurants operated by Pappas, which also owns eateries such as Pappadeaux Seafood Kitchen, Pappas Bros. Steakhouse and Pappas Bar-B-Q. The company has opened more than 100 restaurants in all and operates in Texas and seven other U.S. states.
Federal bankruptcy court documents show an affiliate of Pappas, OTB Hospitality LLC, was the prevailing bidder to purchase On The Border, which is headquartered in the Dallas area and filed for chapter 11 bankruptcy in March in Atlanta, Georgia. On The Border opened in 1982 and operates a total of 80 locations in the United States and internationally, but does not have any restaurants in the Houston area.
“On The Border has always stood out for its energy and bold flavors – it’s a brand we’ve known and respected for years,” Pappas co-owner Chris Pappas said in a Wednesday news release. “This gives us the chance to bring our passion for Tex-Mex to more guests, and we’re excited to build on what makes both brands special.”
The purchase is subject to court approval, with a sale hearing scheduled for May 16 in Atlanta, Georgia. Salud Brands LLC was selected as the backup bidder after Tuesday’s auction.
If its purchase is approved and finalized, it remains to be seen whether Pappas would expand On The Border to the Houston area. When asked Thursday about that possibility, a Pappas representative said, “As we begin this next chapter, we’re taking time to ensure we’re delivering the best possible experience for our guests. This will be a process, and we want to get it right.”
In its news release about submitting the winning bid, Pappas said it plans to “apply its proven operational model” and “strengthen and modernize On The Border locations.”
Daddy positioned itself to buy On The Border before the latter company filed for bankruptcy in early March. Another Pappas affiliate, OTB Lender LLC, provided millions in financing to On The Border to help cover costs associated with the bankruptcy filing, court records show.
Pappas also was the stalking-horse bidder in the bankruptcy case, meaning it provided the initial bid for purchasing On The Border’s assets.
“We’re excited to welcome On The Border to the Pappas family,” Pappas Restaurants CEO Mike Rizzo said in the Wednesday news release. “On The Border is a brand with deep heritage and loyal guests, and we see tremendous opportunity to invest in its future. Our shared Texas roots and passion for hospitality make this a natural fit.”
