Jewelry stores and steakhouses are the symbolic casualties of America’s newfound frugality, as U.S. consumers came to a consensus that bling and beef are nice but not necessary in their new economic normal. Consequently both jewelry chains and steak restaurant chains are well represented on the 2009 Retail Chapter 11 list. Some of these chains will be able to restructure, revamp, and resume operations, but most of them will not make it out of bankruptcy court alive.
Steak restaurants have fared better than most of the retailers in their Chapter 11 dealings in 2009. This is probably because it’s easier to make radical changes to recipes and menus than it is to make radical changes to permanent fixtures filled with physical inventory that people aren’t buying, no matter how pretty it is.
Steakhouses have been particularly challenged to find creative options at acceptable recessionary price points. Steak dinners at all price points are being viewed as expendable luxuries, and are being reserved for special occasions by frugal consumers. But steak restaurants need more than the occasional diner on the occasional occasion in order to be profitable, so they’re using the Chapter 11 process to rethink and retool.
What follows is a list of the U.S. retail steak restaurant chains that have filed Chapter 11 in 2008 and 2009. Most of the Chapter 11 proceedings for these restaurant chains are still unresolved and will be updated as they progress. (The article was last updated on 9-14-09.)
ARG Enterprises (Black Angus Steakhouse, Cattle Company Steakhouse, Stuart Anderson's Restaurants, Stuart Anderson's Black Angus, Stuart Anderson's Cattle Company)
- Filed Chapter 11 in 2004
- Restructured and emerged from bankruptcy in 2005
- Filed Chapter 11 on January 15, 2009
- Closed 13 restaurants
- Was sold to Versa Capital Management Inc
- Filed Chapter 11 on January 22, 2008
- Secured DIP financing from several lenders
- Amended the DIP agreement three times in the Chapter 11 process to extend its maturity
- Changed its corporate structure and Board of Directors, but retained CEO Mike Andrews
- Reduced debt and secured $117.5 million in new first lien exit financing
- Emerged from Chapter 11 on April 28, 2009
- Filed Chapter 11 June 30, 2008
- Secured $1 million DIP credit line
- Closed five stores, and continued operating six locations in Florida
- Emerged from Chapter 11 on April 15, 2009
- Filed Chapter 7 bankruptcy on July 29, 2008
- Closed 150 company-owned Bennigan's, and 50 company-owned Steak and Ale and restaurants on the same day as its bankruptcy filing, putting 9,200 people immediately out of work
- Filed Chapter 11 on October 22, 2008
- Has closed 28 company-owned Ponderosa restaurants since filing Chapter 11.
- Court approved disclosure statement, which contains a bankruptcy exit plan in August. Creditors have until September 22nd to respond to it. A hearing to approve the plan is set for September 29, 2009.
- Plans to emerge from bankruptcy with 225 Ponderosa and 48 Bonanza restaurants.
- Will get three loans from Metromedia Co., a $9.3 million loan, $5.84 million in exit financing to pay off the DIP loan, and a $4.68 million working capital line of credit
- The company changed its name to Homestyle Dining LLC.
- Emerged from Chapter 11 on October 14, 2009.
- Filed Chapter 11 on July 15, 2009
- Closed three of its 27 restaurants in six states
- Company hopes to terminate and restructure leases in order to continue operating