NEW YORK - Restaurant chains Bennigan's and Steak & Ale have filed for Chapter 7 bankruptcy protection, and stores owned by its parent company, including the Boston Bennigan's, will close.
The companies owned by privately held Metromedia Restaurant Group of Plano, Texas, filed for bankruptcy protection yesterday in Texas, less than two months after Metromedia said it was not preparing to do so. Metromedia Restaurant Group is a part of Metromedia Co., owned by billionaire John Kluge.
In a Chapter 7 filing, a company seeks to liquidate its assets and shut down.
Locations owned by franchisees were not part of the filing and will not be shut down, said Larry Briski, president of the Bennigan's Franchise Operator Association.
He said there are about 160 domestic and international franchise locations and about 150 company-owned Bennigan's restaurants.
Meanwhile, employees at what appeared to be a company-owned Bennigan's in Plano were greeted by a sign yesterday on the front door reading "WE ARE CLOSED. THANK YOU." Next door, a Steak & Ale sat empty.
Neither Bennigan's nor the Metromedia Restaurant Group returned calls for comment. A lawyer listed from Carrington, Coleman, Sloman & Blumenthal LLP, did not return a call.
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 deal with gas prices, the weak housing market, and inflation. The hardest hit have been casual dining chains and bar and grill restaurants. Meanwhile, commodity costs have soared, forcing chains to raise menu prices or see profits plunge.