Austin Tex-Mex chain Trudy’s set to get new owner

Austin Tex-Mex restaurant chain Trudy’s is poised to get new ownership, with a hearing for the sale’s approval set for Monday.

Private equity firm Hargett Hunter Capital Management, based in Raleigh, N. C., won an auction to buy the chain, with a bid of $6.5 million, according to court filings.

Trudy’s Texas Star filed for Chapter 11 bankruptcy protection in January. The company is selling its four currently operating locations. Two of those are in leased space, one on Burnet Road and one on South Congress Avenue, and two are in company-owned sites on Stassney Lane and 30th Street. A closed-down Dripping Springs location will not be part of the transaction.

The business is seeking to sell partly because the current owners hope a buyer would be able to turn the chain around financially, said Stephen Sather, attorney for Trudy’s Texas Star.

“The founder, Mr. Gary Wayne Truesdell, was not able to run the business. His son, Stephen Truesdell, was having to take care of the business while working a full-time job,” Sather told the American-Statesman. “The decision was made to find someone else who had both the money and the expertise to make a success of it.”

Hargett Hunter would pay off what the company still owes, Sather said.

The firm has said in interviews that its plan for now is to put Trudy’s on stable footing and continue to operate the company.

“Sadly, Austin has already seen a rash of announcements of iconic and local names that have closed and aren’t reopening. We want to bring certainty to this brand that people don’t have to worry about it” disappearing, managing partner Jeff Brock told CoStar, a commercial real estate information company.

The proposed purchase by Hargett Hunter has been objected by Horizon Bank, which holds a deed of trust lien on Trudy’s 30th Street property. According to court filings, the bank wants more in debt payment than the $689,884.17 in its proof of claim, citing post-petition interest and fees. Horizon Bank is seeking $752,974.12.

The issue will be resolved, Sather said.

“It’s really not that much of a dispute,” he said. “It’s something we will work out. It’s not anything that is going to prevent the sale from going through.”

Truesdell is still looking to sell the property of the shuttered Drippings Springs location, Sather said.

As for the current state of business, Trudy’s is trying to survive the coronavirus pandemic and get back into profitablity, as the company is bringing in about 30% to 40% of pre-pandemic revenue levels, Sather said.

“We’re handing it off to a new group who we hope will give it the same love and attention the original owners have,” Sather said.