Bennigan’s and the Steak and Ale restaurant chains filed for bankruptcy Tuesday, closing all of their Colorado restaurants and hundreds more nationwide.
The dining establishments fell victim to loan difficulties and the effects of a weak economy, analysts said.
All 14 of the Bennigan’s in Colorado — 11 in metro Denver, two in Colorado Springs and one in Fort Collins — were closed Tuesday. The state’s lone Steak and Ale, in Westminster, also closed.
Some 138 restaurants across the nation owned by franchisees will remain open, but all of the Colorado outlets are company- owned and thus part of Tuesday’s closure of 292 locations.
The chains’ corporate parent, Plano, Texas-based Metromedia Restaurant Group, filed for Chapter 7 bankruptcy in U.S. Bankruptcy Court in Sherman, Texas. The petition listed assets totaling as much as $778.9 million and debt of as much as $324.2 million.
Chapter 7 bankruptcies typically involve the closing and liquidation of firms, unlike Chapter 11 filings, in which businesses continue to operate and attempt to restructure finances.
“When chains the size of Bennigan’s and Steak and Ale shut down, usually it’s about their debt level, not their operations,” said Denver-based restaurant consultant John Imbergamo.
Last month, Metromedia Restaurant Group held talks with its major lender, GE Capital Solutions, after GE said loan agreements had been violated.
Imbergamo said Bennigan’s and similar national chains such as Applebee’s and Chili’s have been affected by economic weakness.
“They’ve been hurt, but not crippled, by the economy,” he said. “The casual, midscale chains are more susceptible than the fine- dining segment or fast food. Sometimes, the middle is the worst place to be.”
Metromedia’s Ponderosa and Bonanza steakhouse chains were not part of the bankruptcy filing or closure plan.
Steve Raabe: 303-954-1948 or sraabe@denverpost.com
