DALLAS – The Plano, Texas-based owners of Bennigan’s Grill & Tavern abruptly closed the troubled chain and two sister brands Tuesday, weeks after saying they faced severe financial problems.

A spokeswoman for Metromedia Restaurant Group said in an e-mail Tuesday that S & A Restaurant Corp., which operated the Steak & Ale, Bennigan’s and The Tavern restaurants, filed for bankruptcy under Chapter 7. In a Chapter 7 filing, all assets are sold off to pay debtors and the company closes.

The filing only applied to corporate-owned locations, not franchised units, the e-mail said. S & A is a subsidiary of Metromedia. The filing does not include the Ponderosa and Bonanza chains, which operate under Metromedia Steakhouses Company, L.P., another subsidiary.

A receptionist at company headquarters said officials had no comment.

Managers at five Dallas-area restaurants said they were told early Tuesday to furlough the staff and leave – for good.

Most got the news via an 8 a.m. conference call, said one manager, who declined to be named because employees were told not to talk to the media.

The parking lot at the Bennigan’s Grill & Tavern near Interstate 635 in Dallas remained eerily quiet Tuesday during what would normally be the lunch rush.


Charlie Parke and two colleagues walked up to the restaurant to find the front door padlocked.

They read the sign that said, “Closed until further notice.” When they were informed the chain was closing restaurants across the country, said Parke. “So ‘Closed until further notice’ means ‘Closed forever?”‘

The move – which shuttered old and new locations – puts workers across the country on the unemployment line. “They’re out of a job just like me,” the manager said.

As of late May, there were at least 150 corporate Bennigan’s operating in the U.S. – half of the brand’s total head count.

An additional 150 Bennigan’s owned by franchisees are not immediately affected. But the franchisees now find themselves owning a brand with no corporate cousins.

Some Bennigan’s restaurants employed as many as two dozen workers each.

The move also closes all locations of Steak & Ale, founded by restaurant icon Norman Brinker. As of late May, there were 58 Steak & Ales, all corporate owned.

The store closings end a tumultuous period for the decades-old Bennigan’s.

In late May, Clay Dover, president and chief executive of Metromedia, quit abruptly after about six months on the job, saying he and the owners could not agree on “the strategic direction for the company.”

Days later, the company denied a report in the Wall Street Journal that it had prepared a bankruptcy filing, but conceded it was “currently in the process of formulating a proposal to present to its lenders to restructure its indebtedness.”


By mid-morning, the grapevine had moved faster than managers who were trying to reach staff members by phone to tell them not to come in. “Word of mouth is out there,” said another Bennigan’s manager who did not want his name used. “So most already know.”

But for customers, such as Parke, who did not know, they showed up expecting to enjoy a meal.

The 58-year-old Dallas resident said he and his co-workers ate at Bennigan’s at least once every two weeks and that he enjoyed the consistency of the chain.

His colleague Jim Brown, 48, of McKinney, Texas, said he loved the $4.99 lunch menu and was going to miss the chicken salad. But he also had more immediate concerns – lunch.

“Is there a Chili’s around here somewhere?” he asked.

—

(c) 2008, The Dallas Morning News.

Visit The Dallas Morning News on the World Wide Web at http://www.dallasnews.com/

Distributed by McClatchy-Tribune Information Services.

—–

PHOTOS (from MCT Photo Service, 202-383-6099): bennigans

AP-NY-07-29-08 1427EDT