Bankruptcy Shutters Bennigan's, Steak & Ale

Chapter 7 filings mean corporate-owned locations unlikely to reopen
By Drew Nelles,  Newser Staff
Posted Jul 29, 2008 2:33 PM CDT

(Newser) – In a move that has hundreds of restaurants closed and thousands of workers laid off, casual-dining chains Bennigan’s and Steak & Ale filed for bankruptcy today, the Wall Street Journal reports. Sources say the restaurants’ parent company—which violated a lending agreement this year—had put off declaring bankruptcy for months as it negotiated with lenders.

The Chapter 7 filing means assets owned by the corporation will be sold off to pay debtors, the Dallas Morning News notes, meaning outlets owned by franchisees could remain open. It’s one of the biggest-ever restaurant bankruptcies, but only the latest bellyache for the casual-dining landscape: High food and labor costs are bringing profits down, while a rocky economy steers consumers away from mid-priced establishments.