Real Mex Restaurants Inc., the bankrupt operator of the El Torito, Chevys and Acapulco chains, announced late Tuesday that its board has approved the company’s sale to a group of debt holders that includes Tennenbaum Capital Partners of Santa Monica.

The sale of nearly all the assets of the Cypress-based company to an entity that includes Chicago private equity firm Z Capital Partners and J.P. Morgan Investment Management must still be approved in U.S. Bankruptcy Court. A hearing is scheduled for Friday.

Real Mex was the largest operator of full service Mexican restaurants in Los Angeles County at the time of its October bankruptcy filing, with about 30 locations. The company, which currently operates 144 restaurants, has shut down 30 outlets nationwide over the past six months, according to the trade publication Nation’s Restaurant News.

Owned by Sun Capital Partners, a Boca Raton, Fla. private equity firm, Real Mex was hit hard by slumping sales, debt payments and rising food costs. The company received debtor-in-possession financing to continue operating during the restructuring.

“We remain confident in our turnaround plans and are looking forward to putting this challenging but necessary process behind us,” said Real Mex Chairman and Chief Executive David Goronkin. “We are close to accomplishing our objectives in the Chapter 11 process and have the right teams in place to move our brands and company forward.”

The board chose the Tennenbaum group over a competing bid from Harshad Dharod, owner of Friendly Franchisees Corp., a franchise operation that owns and operates Carl’s Jr., Papa John’s and Denny’s restaurants through affiliates, according to Nation’s Restaurant News.

Tennenbaum has invested in some 200 companies since its 1999 founding by Michael Tennenbaum, a former Bear Stearns executive. The company, which takes investment positions of up to $250 million, has some $5 billion under management, according to its website.

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