Author Topic: BH - Biglari Holdings  (Read 1326190 times)

NBL0303

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Re: BH - Biglari Holdings
« Reply #2840 on: June 04, 2019, 12:21:49 PM »
Hey all:

Drove by the SNS that I used to eat at yesterday.

Almost all the signage is down, drive through menus & promotional signs in windows are gone.  Only signage is on/physically built into the building and the sign at the street.

Looks like this is long term mothballing.  Others who says most closed locations will never re-open are probably right.

Well over 100 locations closed down now. Which I've heard some others argue is actually a good thing. Of course, if the company (read: Sardar Biglari) has the silly conceit that these stores could possibly re-open at some point and spends a significant amount of money aiming towards that - that is one way trouble could come.
« Last Edit: June 04, 2019, 01:14:12 PM by NBL0303 »


Parsad

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Re: BH - Biglari Holdings
« Reply #2841 on: June 04, 2019, 07:14:09 PM »
For our tax specialist friends out there, if Biglari sells 400 restaurants for $10K each...which is only $4M...can he write off the $250M+ loss in Plant & Property against the gains in Cracker Barrel?

If so, on paper BH takes a big loss on the sale of the stores, but they gain on the taxes they would have had to pay if they sold CRBL...and their income will increase dramatically from the new profit-sharing structure.

Cheers!
No man is a failure who has friends!

gfp

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Re: BH - Biglari Holdings
« Reply #2842 on: June 05, 2019, 06:08:20 AM »
I doubt it, at least as described.  You don't become the actual owner of property under the $10k deal.  You don't own much at all really.

For our tax specialist friends out there, if Biglari sells 400 restaurants for $10K each...which is only $4M...can he write off the $250M+ loss in Plant & Property against the gains in Cracker Barrel?

If so, on paper BH takes a big loss on the sale of the stores, but they gain on the taxes they would have had to pay if they sold CRBL...and their income will increase dramatically from the new profit-sharing structure.

Cheers!

Foreign Tuffett

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Re: BH - Biglari Holdings
« Reply #2843 on: June 05, 2019, 06:34:42 AM »
I doubt it, at least as described.  You don't become the actual owner of property under the $10k deal.  You don't own much at all really.

For our tax specialist friends out there, if Biglari sells 400 restaurants for $10K each...which is only $4M...can he write off the $250M+ loss in Plant & Property against the gains in Cracker Barrel?

If so, on paper BH takes a big loss on the sale of the stores, but they gain on the taxes they would have had to pay if they sold CRBL...and their income will increase dramatically from the new profit-sharing structure.

Cheers!

I agree with gfp. I think it's more of a "buying yourself a job" type of deal.

OracleofCarolina

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Re: BH - Biglari Holdings
« Reply #2844 on: July 22, 2019, 02:28:24 PM »
S&P warns "elevated likelihood" that Steak 'n Shake, with over 600 locations, "will be unable to meet its near-term interest and principal obligations (with the next $5 million interest payment due in September 2019)," downgrades burger chain deep into junk to "CCC-" rating.

Parsad

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Re: BH - Biglari Holdings
« Reply #2845 on: July 22, 2019, 02:59:08 PM »
S&P warns "elevated likelihood" that Steak 'n Shake, with over 600 locations, "will be unable to meet its near-term interest and principal obligations (with the next $5 million interest payment due in September 2019)," downgrades burger chain deep into junk to "CCC-" rating.

How is that possible with millions and millions sitting in Cracker Barrel that Sardar could lend or inject as equity into SNS?  I'm assuming the analyst is looking at SNS as a stand-alone entity.  Does he think that Sardar would let SNS go bankrupt without pulling as much cash as he can out of the chain...such as selling the whole business first?  Cheers!
No man is a failure who has friends!

Tim Eriksen

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Re: BH - Biglari Holdings
« Reply #2846 on: July 22, 2019, 03:26:13 PM »
S&P warns "elevated likelihood" that Steak 'n Shake, with over 600 locations, "will be unable to meet its near-term interest and principal obligations (with the next $5 million interest payment due in September 2019)," downgrades burger chain deep into junk to "CCC-" rating.

How is that possible with millions and millions sitting in Cracker Barrel that Sardar could lend or inject as equity into SNS?  I'm assuming the analyst is looking at SNS as a stand-alone entity.  Does he think that Sardar would let SNS go bankrupt without pulling as much cash as he can out of the chain...such as selling the whole business first?  Cheers!
Easy.  It is non recourse.  Why would he inject equity only to have it go out the door as interest payments or operating losses?  SNS is bleeding cash.   Q1 was brutal.
 What is a money losing restaurant chain with high debt levels that is rapidly closing stores worth?  The answer could be less than zero.

Foreign Tuffett

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Re: BH - Biglari Holdings
« Reply #2847 on: July 22, 2019, 03:46:36 PM »
S&P warns "elevated likelihood" that Steak 'n Shake, with over 600 locations, "will be unable to meet its near-term interest and principal obligations (with the next $5 million interest payment due in September 2019)," downgrades burger chain deep into junk to "CCC-" rating.

How is that possible with millions and millions sitting in Cracker Barrel that Sardar could lend or inject as equity into SNS?  I'm assuming the analyst is looking at SNS as a stand-alone entity.  Does he think that Sardar would let SNS go bankrupt without pulling as much cash as he can out of the chain...such as selling the whole business first?  Cheers!
Easy.  It is non recourse.  Why would he inject equity only to have it go out the door as interest payments or operating losses?  SNS is bleeding cash.   Q1 was brutal.
 What is a money losing restaurant chain with high debt levels that is rapidly closing stores worth?  The answer could be less than zero.

I agree with Tim here. Sardar has consistently mentioned over the years that this debt is non recourse to the corporate parent.

Steak n Shake right now is a binary situation in that it's worth little in its current state, but could be quite valuable if turned around. 

Parsad

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Re: BH - Biglari Holdings
« Reply #2848 on: July 22, 2019, 04:16:23 PM »
I just find it hard to believe he's going to pull a Lampert here...not hard to believe...but a waste of a terrific brand and restaurant.  Cheers!
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Orchard

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Re: BH - Biglari Holdings
« Reply #2849 on: July 22, 2019, 05:48:20 PM »
yeah it's like saying that a LBO could go bankrupt. The PE fund always has more money so how could a PE owned business ever go bankrupt.