The United States Bankruptcy Court for the Middle District of Florida issued a Memorandum Opinion on March 31, 2026, confirming the Joint Plan of Reorganization of Bravo Brio Restaurants, LLC and its affiliated debtors while estimating at $0 the nearly $12 million in claims asserted by restaurant financing company inKind. The opinion, entered in Case No. 6:25-bk-05224-LVV, resolves a contested confirmation proceeding in which inKind was the sole objecting creditor, with every other voting class unanimously supporting the plan.
Company Background and Business Operations
Bravo Brio Restaurants, LLC operates restaurants nationwide under two brand names: Brio Italian Grille and Bravo! Italian Kitchen. The company acquired its assets in 2020 through a Section 363 sale in the Chapter 11 bankruptcy of FoodFirst Global Restaurants, Inc. In that transaction, senior lender GPEE Lender, LLC prevailed at auction via credit bid and assigned the sale rights to the company, which assumed $23 million in GPEE senior secured debt.
The company is the sole owner of six subsidiary entities, each functioning as a special purpose vehicle associated with a particular restaurant location. Each subsidiary holds the lease, liquor license, and furniture, fixtures, and equipment interests for its respective restaurant. Four of the six subsidiaries are debtors in the jointly administered cases.
On the petition date of August 25, 2025, the debtors operated 48 restaurants and employed approximately 4,000 individuals. By the time of the confirmation trial in January 2026, operations had been reduced to 43 restaurants with approximately 3,000 employees.
The inKind Relationship and the Credit Purchase Agreement
The central dispute in the case involves a Credit Purchase Agreement between the company and inKind, a restaurant financing company that purchases credit from restaurant operators at a substantial discount and resells it to consumers through a smartphone application at close to face value.
In July 2023, the company and inKind entered into the Credit Purchase Agreement, under which inKind purchased $5 million in credit for $2.5 million. The agreement was later amended to add another $2 million in credit for $1 million, bringing the total to $7 million in credit acquired by inKind for $3.5 million. The company's subsidiaries were not parties to the agreement.
A critical feature of the agreement required the company to honor credit sold by three "Sister Merchants," identified as Buca, LLC, PB Restaurants, LLC, and OCS Restaurant Holdings, LLC, without receiving any additional compensation. The agreement did not specify the amount of credit purchased from the Sister Merchants and did not limit the company's responsibility to honor that credit. The agreement was governed by Delaware law.
The agreement contained several provisions that became central to the court's analysis. Upon an event of default, liquidated damages would be calculated at $0.65 times the amount of "purchased Credit" not yet sold or redeemed. A Limitation of Liability provision capped the company's aggregate liability at $5 million, an amount equal to the initial credit purchase. Notably, this cap was not modified when the agreement was amended to include additional credit.
Rejection and the Path to Confirmation
On September 5, 2025, the debtors filed a motion to reject the inKind agreement, arguing it was burdensome because the company was honoring approximately $75,000 per week in credit without receiving revenue from those sales. inKind objected, contending that the agreement was not an executory contract but a security agreement. The court granted rejection on October 30, 2025, finding the agreement executory under the Countryman definition and ruling that rejection was a proper exercise of business judgment.
Following rejection, inKind filed 15 total proofs of claim (three identical claims in each of the five bankruptcy cases), each seeking $11,932,899 and asserting a security interest in the debtors' assets.
Estimation of inKind's Claims at Zero
The court's contract interpretation analysis, applying established principles of Delaware law, proved decisive. The opinion concluded that the parties intended upon default that the company would only be responsible for damages based on unredeemed credit it sold to inKind, not credit sold by the Sister Merchants.
The court reached this conclusion by examining several provisions of the agreement as a whole. Liquidated damages were calculated on "purchased Credit" not yet sold or redeemed. Because "purchased" modifies "Credit," the court found it referred to something less than the general term "Credit" used elsewhere to describe what the company must redeem. The default provisions made no reference to credit sold by Sister Merchants, and the agreement contained no cross-default or cross-collateralization language tying the company's liability to the Sister Merchants' obligations. The limitation of liability, capped at $5 million (equal to the initial credit purchase amount), further supported this interpretation.
The unrebutted testimony at trial established that over $7 million in credit had been redeemed at the debtors' restaurants, with the company's general counsel testifying that $8 million had been redeemed, exceeding the $7 million in credits sold by the company to inKind. inKind did not dispute these calculations and introduced no evidence regarding unredeemed credit specific to the company as opposed to Sister Merchant credit.
The court estimated inKind's claims at $0 for all purposes under Section 502(c) and Bankruptcy Rule 3018, sustained the debtors' omnibus objection, disallowed all 15 proofs of claim in their entirety, and ordered the release of any liens held by inKind on the debtors' assets. The court also noted in a footnote that if it were necessary to address whether inKind held a security interest, it would conclude that inKind did not: the debtor subsidiaries did not execute the agreement, and as to the parent company, inKind's interest would be junior to GPEE with no remaining value for inKind's lien to attach.
Disclosure Statement Approval
inKind's challenge to the Disclosure Statement centered on the fact that the solicitation package it received via U.S. mail did not include the Disclosure Statement. The court found this deficiency harmless. inKind's counsel received the Disclosure Statement electronically via the court's CM/ECF system on December 9, 2025, three days before the solicitation package was mailed. The court noted that under the local rules of the Middle District of Florida, registration as an Electronic Filing User constitutes a waiver of the right to receive service by first-class mail. inKind's pleadings and arguments at trial demonstrated that it fully understood the terms of the plan, and no other creditors raised concerns about not receiving the Disclosure Statement.
The court found the Disclosure Statement contained adequate information, noting that it specified what allowed general unsecured claims would receive (a pro rata distribution of $750,000), when they would receive it (on the effective date), and all contingencies to receiving the distribution.
The Confirmed Plan of Reorganization
The confirmed Second Modified Plan of Reorganization provides for the continued operation of all debtor entities. Upon confirmation, Champion will fund an additional $4.5 million into GPEE (having already funded $3.5 million into GPEE during the case to finance a DIP loan). Post-confirmation, R&R Brands, a Champion affiliate, will oversee day-to-day operations.
The plan has ten classes: one priority claims class, seven secured claims classes, one unsecured claims class, and one equity interests class. All classes are impaired. Allowed general unsecured creditors in Class 9 will receive a pro rata distribution of $750,000 from the sale of a liquor license at the company's Freehold, New Jersey restaurant. Equity interests will vest in GPEE or its designee on the effective date.
Creditor support was overwhelming. All classes other than inKind voted to accept the plan, with claims totaling over $32 million. In Class 9, 17 creditors cast ballots in favor of the plan.
Confirmation Requirements
The court systematically addressed each of the confirmation requirements challenged by inKind.
On good faith under Section 1129(a)(3), the court found no abuse of the judicial process, characterizing the failure to mail the Disclosure Statement to inKind as harmless error.
On the best interests test under Section 1129(a)(7), the debtors' liquidation analysis demonstrated that unsecured creditors would receive nothing in a Chapter 7 liquidation, compared to a pro rata share of $750,000 under the plan. inKind failed to specify which individual debtor estates would have assets available for unsecured creditors or to identify flaws in the liquidation analysis.
On the impaired accepting class requirement of Section 1129(a)(10), the court acknowledged a split of authority on whether the requirement applies on a per-plan or per-debtor basis but found it satisfied under either approach. The court distinguished a prior Middle District of Florida decision that had applied a per-debtor analysis, noting that class gerrymandering was present in that case but not here.
On feasibility under Section 1129(a)(11), the court credited testimony regarding the $4.5 million capital infusion, 2026 projections indicating $11 million available to cover plan payments, and the expected sale of the liquor license within three to six months. inKind presented no evidence to contradict this testimony.
Because inKind's claim was estimated at $0, the court found the plan did not impair inKind, all classes accepted the plan, and Section 1129(a)(8) was satisfied without need for a cramdown analysis under Section 1129(b).
Key Dates
| Date | Event |
|---|---|
| 2020 | Company acquired assets through Section 363 sale in FoodFirst bankruptcy |
| July 21, 2023 | Credit Purchase Agreement executed with inKind |
| August 25, 2025 | Chapter 11 petitions filed |
| September 5, 2025 | Motion to reject inKind agreement filed |
| October 30, 2025 | Court granted rejection of inKind agreement |
| December 9, 2025 | Disclosure Statement and Original Plan filed |
| January 19, 2026 | Omnibus objection to inKind's claims filed |
| January 27, 2026 | Trial on confirmation, disclosure statement, and estimation |
| March 31, 2026 | Memorandum Opinion issued |
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