CHICAGO, Illinois - July 29, 2008 - Customers showing up for lunch at Bennigan's restaurants in Chicago and across the country found quite a surprise Tuesday morning, when all the corporate-owned locations had signs on display reading "closed for business."
As CBS 2's Joanie Lum reports, Bennigan's Grill and Tavern closed all of its corporate-owned locations nationwide after filing for bankruptcy. Independent franchises remain open for business as usual.
The corporate-owned locations comprise about half the entire chain. The two locations in downtown Chicago, at 225 N. Michigan Ave. and 150 S. Michigan Ave., are both among them, and the doors to both were locked Tuesday morning.
Inside, neon signs remained lit, but the "closed for business" signs shooed passersby away. Managers said the mass-shutdown went into effect at midnight Monday night, and there was no warning.
Managers of Bennigan's location in Calumet City, and locations in Miami, Dallas and New Jersey also all confirmed to CBS 2 and our sister stations that their restaurants had shut down.
Bennigan's spokeswoman Leah Templeton said Bennigan's and Steak & Ale restaurants - both of which are owned by Plano, Texas-based Metromedia Restaurant Group - have filed for bankruptcy, along with the holding company S&A Restaurant Corp.
But not all stores that use the Bennigan's and Steak & Ale names have filed for Chapter 7 bankruptcy, Templeton said in a statement. Franchise locations are not named as debtors in the bankruptcy filing and thus are not affected, she said.
The statement said a trustee would determine "future decisions regarding the affairs of the debtor companies."
CBS 2 Legal Analyst Irv Miller explains that Chapter 7 bankruptcy means the company is being liquidated, as opposed to Chapter 11 bankruptcy, in which a company tries to reorganize and remain in business.
Miller said a Chapter 7 filing usually means a company has "major league debt," and it is unlikely that employees would get their last paycheck. He said someone could conceivably buy the assets and reopen the full Bennigan's chain, but that would only be after a long, drawn out court process.