New owner for Bennigan's, Steak & Ale

October 22, 2008 4:54:06 PM PDT
The Bennigan's and Steak & Ale chains, whose parent company filed for Chapter 7 bankruptcy protection this summer, have a new owner. Atalaya Capital Management, a private-equity firm, said Wednesday it is buying the brands, their trademarks and equity for an undisclosed price. The acquired assets include the Bennigan's Franchising Co., which was formed by franchisees after the company filed for bankruptcy.

Atalaya said the U.S. Bankruptcy Court for the Eastern District of Texas has approved the deal, which is expected to close on or before Oct. 31.

"We're thrilled to have reached an agreement with the bankruptcy court for the acquisition of Bennigan's Franchising Co. and our goal is to continue to partner with existing franchisees, as well as new ones, to grow the Bennigan's Grill & Tavern brand," said Atalaya partner Joel Holsinger in a statement.

The parent company of both the Bennigan's and Steak & Ale brands, S&A Restaurant Corp., filed for bankruptcy protection at the end of July under pressure to repay its debts. S&A was owned by Metromedia Restaurant Group, a part of billionaire John Kluge's empire. In a Chapter 7 filing, a company seeks to liquidate its assets and close its doors.

The filing did not include 138 domestic and international franchisee-owned restaurants. Those locations remained open and the franchisees banded together in the Bennigan's Franchising Co. to keep the chain alive. They have been working to sell the previously-closed company-owned locations to new or existing franchisees.

Atalaya said it will develop a new "culinary program" and will appoint a marketing consultant to "help reposition the brand going forward." The company added it may introduce a new "fast-pub" concept.

Separately, another Metromedia subsidiary -- Metromedia Steakhouses Co. -- filed for Chapter 11 bankruptcy protection Wednesday in a Delaware court. Metromedia Steakhouses owns the Ponderosa and Bonanza Steakhouse chains. A Chapter 11 bankruptcy allows a company to restructure its balance sheets.

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