Buffets lines up $120 mln loan for bankruptcy exit

NEW YORK, March 2 (Reuters) - U.S. restaurant chain Buffets Holdings Inc will seek court approval this week for a $120 million loan to fund its exit from bankruptcy protection.

Credit Suisse agreed earlier this month to provide the senior secured loan for the company, which operates the Old Country Buffet restaurant chain, according to court documents.

Buffets filed court papers on Friday saying it has not received any objections or responses to its proposal for exit financing.

Buffets filed for bankruptcy protection in January 2008, saying its core customers had cut discretionary spending.

A court hearing on the deal is scheduled for March 4, and the company has said it is hoping to exit bankruptcy protection during the first quarter. Buffets had delayed the confirmation of its bankruptcy reorganization plan while it worked to line up an exit financing loan.

Such loans have been extremely difficult for bankrupt companies to obtain in recent months, as lenders pulled back on loans of all kinds amid the global credit crisis.

Buffets is also seeking approval to pay Credit Suisse a nonrefundable $1 million structuring fee for arranging the deal.

Buffets is the largest U.S. steak-buffet restaurant chain, with 536 company-owned restaurants and 14 franchise locations. It had 31,000 employees in mid-December, according to court papers.

The case is In re: Buffets Holdings Inc, U.S. Bankruptcy Court, District of Delaware, No. 08-10141. (Reporting by Emily Chasan; editing by Jeffrey Benkoe)