PGHC Holdings has filed for bankruptcy protection through a stalking horse sales agreement with private equity investment firm Wynnchurch Capital.

This move will allow the company to maintain normal restaurant operations prior to sale with improved liquidity.

PGHC will also solicit competing offers to maximise the value of the sale, which is currently subject to court approval.

PGHC’s chief financial officer Corey Wendland said: “We are pleased to have reached an agreement that will ensure a long and prosperous future for these iconic New England restaurants.

“For some time, we have been pursuing a plan to strengthen our financial footing and secure capital for investment in our restaurants, while also addressing our significant debt load. We are confident that the agreement with Wynnchurch achieves all of those goals.”

“We have been pursuing a plan to strengthen our financial footing and secure capital for investment in our restaurants.”

The deal is expected to strengthen PGHC’s financial resources, allowing it to remodel and modernise 141 restaurants in Massachusetts, New Hampshire, Rhode Island and Connecticut. It will also allow the company to open additional restaurants across New England and enhance its online ordering capabilities.

PGHC has sought court approval for debtor-in-possession financing from Wynnchurch to provide additional liquidity during the sale process.

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After conducting a review and analysis, PGHC also closed approximately 95 under-performing restaurants to address the debt structure and focus its financial resources. The company intends to relocate certain team members from closing restaurants to other locations.

Suppliers will be paid on normal terms and schedules for goods and services received during the Chapter 11 process.

PGHC Holdings is the parent company of Papa Gino’s Pizzeria and D’Angelo Grilled Sandwiches. The company will operate the remaining 100 Papa Gino’s restaurants and 78 D’Angelo Grilled Sandwiches restaurants until the sale.