Bennigan's Closes Stores, Files For Bankruptcy

Texas HQ Confirms Chapter 7 Filing

The parent company of Bennigan's restaurants confirmed Tuesday that Bennigan's parent company closed its company-owned stores nationwide Tuesday after it filed for bankruptcy.

"S & A Restaurant Corp. and certain affiliates have filed for bankruptcy under Chapter 7 of the bankruptcy code. The companies that filed bankruptcy cases are popularly known as Steak & Ale, Bennigan's and Tavern restaurants. However, not all stores using these trade names have filed bankruptcy," said Leah Templeton, with the public relations firm BizCom Associates. "For example, stores operated by franchisees are not named as debtors in these filings. The filing does not include Ponderosa and Bonanza which operate under Metromedia Steakhouses Company, L.P.

Metromedia has around 150 company-owned stores and 160 domestic and international franchise locations.

Employees in the Denver metro area showed up for work only to find the restaurants closed.

“We just heard we’re done,” said Nikki Hosack, who worked at the Bennigan’s on Colorado Boulevard.

Hosack said the news came unexpectedly and was difficult to hear.

“Yeah, I’m a single mom with two kids,” she said.

Another employee told 7NEWS he was told Tuesday morning not to show up for work.

“My manager Joel called me and told me we filed Chapter 7 and went out of business,” said Michael Wesberg.

Weisberg and several other employees told 7NEWS all 11 Bennigan’s locations in Colorado are corporate-owned and were closed.

Templeton could not confirm the exact number of restaurants affected by the bankruptcy filing Tuesday afternoon.

Employees who spoke with 7NEWS said they were given final paychecks before being sent home.

“It’s a sign of the times isn’t it?” asked former employee April Gatewood.

Gatewood said she’s seen current economic conditions take a toll on customers and overall business lately.

“Money’s been getting a little bit less because people don’t have it. You can go get gas or go out to lunch,” Gatewood said.

Templeton said the privately held company has not offered a public explanation about what led to the bankruptcy filing, but hoped to have more information Wednesday.

WBBM TV in Chicago was the first to report Tuesday that the manager of a Bennigan's in suburban Chicago told them he was told of the shutdown by his regional manager just after midnight.

Before the company confirmed the closings, telephone calls to a number of Bennigan's in Colorado weren't answered, but an employee answering the phone at a Colorado Springs Bennigan's said the restaurants were closed nationwide Tuesday. He said he believed the shutdown is only temporary.

The manager of the Bennigan's in Fort Collins also confirmed his restaurant was out of business. He told the Coloradoan that he was informed at 8 a.m.

The manager of the Bennigan's on Arapahoe Road and Interstate 25 told 7NEWS 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.

Calls made to Bennigan's in other states also resulted in similar comments before the news was confirmed by the company.

The chain started in 1976. Of the nearly 800 restaurants in 32 states that generated more than $800 million in annual sales, according to its Web site, 11 restaurants are located in Colorado.

Metromedia, which owns Bennigan's, Ponderosa and Steak and Ale, announced last month that it put 59 of its Florida restaurants up for sale or lease.

A recorded message at the Westminster Steak and Ale, the only one in Colorado, told callers it too had closed. Additional numbers were given for employees and vendors to call.

The Wall Street Journal also reported that Metromedia had violated terms of a loan agreement with GE Capital Solutions and had prepared a bankruptcy filing, a report the company denied.

“It’s not a surprise the economy is sluggish,” said Pete Meersman, president and CEO of the Colorado Restaurant Association.

While the corporate decisions affecting Bennigan’s have an impact in Colorado, Meersman said the situation is not reflective of what he’s heard from local restaurant owners about current conditions.

“Colorado is much better off than other states,” Meersman said.

7NEWS Reporter Lane Lyon contributed to this report.

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