No More Bennigans

Shit! Now where am I going to eat on the holidays.

Bennigan's Closed After Parent Co. Files For Bankruptcy

Independently Owned Franchises Not Included In Bankruptcy Filings

POSTED: 8:57 am CDT July 29, 2008

UPDATED: 1:47 pm CDT July 29, 2008

FORT WORTH, Texas -- The parent company of Steak & Ale, Bennigan's Grill & Tavern, and Tavern restaurants has filed for bankruptcy while employees of Bennigan's report that company-owned franchises are closed nationwide as of Tuesday, less than two months after their parent company said it was not preparing to shut down.The restaurants, owned by Plano-based Metromedia Restaurant Group, filed for bankruptcy protection in the Eastern District of Texas under Chapter 7 of the bankruptcy code early Tuesday, NBC 5 reported.In a Chapter 7 bankruptcy filing, a company seeks to liquidate its assets and shut down.

In the filing, the company indicated that it has up to 49 creditors. It said it would have no funds left after administrative expenses are paid to repay its creditors.Independently owned franchises are not included in the filings, and the filings do not include the Metromedia-owned Ponderosa Steakhouse and Bonanza Steakhouse restaurants.

NBC 5 called a local Bennigan's Tuesday morning and was told, "We won't be opening anymore." A call to the company's headquarters yielded a "no comment" early Tuesday.Employees at a Bennigan's in Plano were greeted by a sign Tuesday on the front door reading "WE ARE CLOSED. THANK YOU." Next door, a Steak & Ale sat empty in a deserted parking lot but there was no sign posted.The manager of a Colorado Bennigan's told KMGH-TV he was spending the morning calling employees to tell them not to come in. He did not want to be identified by name."This sucks. I'm out of a job," he said.A waiter named Steve, who wouldn't give his last name, said the staff got a phone call Tuesday morning telling them the restaurant was closing.Neither Bennigan's nor the Metromedia Restaurant Group returned calls for comment.A lawyer listed in the filing, J. Michael Sutherland of Carrington, Coleman, Sloman & Blumenthal LLP, did not return a call.According to a recorded message on the law firm's answering system, not all stores using the Bennigan's and Steak & Ale trade names have filed for bankruptcy and some franchise locations were not included in the filing.The filing lists 38 separate entities that it classified as "debtors" but does not include a list of locations that are shutting down.All restaurants have been struggling as consumers cut back on discretionary spending to better deal with high gas prices, the weak housing market and inflation. The hardest hit have been casual dining chains and bar and grill restaurants, which charge higher prices than fast food and other quick-service chains.Bar and grill restaurants have also suffered from intense competition. Morningstar analyst John Owens said several chains expanded quickly, making it more difficult for customers to differentiate between them and forcing many companies to cut prices to lure diners."Bennigan's was the weakest of the major players," Owens said.Meanwhile, commodity costs have soared, forcing chains to either raise menu prices or see profits plunge.Credit has also been tight, making it difficult for companies to restructure their debt.In June, Metromedia Restaurants said it was formulating a proposal to present to its lenders to restructure its debt, but said it was not preparing to file for bankruptcy.In the filing, the company indicated that it has up to 49 creditors and owes less than $50,000. It said it will have no funds left after administrative expenses are paid to repay its creditors.The news appeared to be a shock to most of the company's employees, but some may have had an inkling that the company was not doing well.Steve, the Bennigan's waiter in Plano, said he recently went from making $30 on a good lunch shift to only $10."Business has been slow," said Steve, who said he relies on tips. "I went from making a lot of money on a shift to making very little."Of the nearly 800 restaurants generating more than $800 million in annual sales, 20 restaurants are located in North Texas, according to Bennigan's Web site.Steak & Ale was founded in Plano in 1966. Bennigan's was established 10 years later in Atlanta.

True story - after we lost my uncle, my mom and I always went to either Bennigan's or TGI Friday's on the holidays. No sense in making a big holiday dinner for 2 people. In more seriousness, this puts a lot of people out of work. And the job market is tough as it is. This further enforces my view point that America is headed toward another great depression.