In November 2003, John Fruehwirth, Principal at Allied Capital, given $ 20 million mezzanine investment in growth capital for Elephant Bar, a California restaurant chain. Elephant Bar had its first successes in California but now Allied Investment Committee had to wrestle with the question of whether the restaurant concept strong enough to travel and become a national brand or whether it was primarily one was “California Concept.” And if the concept was strong enough to travel, where … Read more »

In November 2003, John Fruehwirth, Principal at Allied Capital, given $ 20 million mezzanine investment in growth capital for Elephant Bar, a California restaurant chain. Elephant Bar had its first successes in California but now Allied Investment Committee had to wrestle with the question of whether the restaurant concept strong enough to travel and become a national brand or whether it was primarily one was “California Concept.” And if the concept strong enough, was to travel, Allied Capital would be able to meet their underwriting standards? Since Elephant Bar is a company with aggressive growth plans, it is more risky than traditional mezzanine investments. The housing can invest in courses on venture to be used another source of financing for young business illustration. Traditional Mezzanine financing is often used to provide part of the funds for late-stage investments, such as leveraged buyouts. The case can also be used in courses on private equity to show the perspective of risk mitigation strategies and expected returns from mezzanine investors. This case has observed a lesson and a table that are for registered members of the teaching staff.
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from
Susan Chaplinsky,
Kristina Anderson
Source: Darden School of Business
29 pages.
Release Date: 20, September 2008. Prod #: UV1191-PDF-ENG
Elephant Bar Restaurant: Mezzanine financing HBR case solution