Chicago Bennigan's closes unexpectedly

July 29, 2008 3:32:36 PM PDT
Even employees were shocked to see the signs go up this morning. Many Bennigan's restaurants across the country are closed as the company files for bankruptcy. Many Bennigan's in the Chicago area are among those to cease operations. Restaurant managers learned of the closings in a flurry of late night telephone calls from their bosses.

There were signs of trouble, at least for the Bennigan's corporate-owned restaurants, back in June when word leaked that the company was considering filing for bankruptcy amid a mountain of debt that it was trying to restructure. Bennigan's corporate owner at the time, based in Plano, Texas, denied that it was going to file for bankruptcy. But Tuesday it did. In those late-night phone calls it told its employees and the corporate-owned restaurants that their jobs are gone.

The lunch crowd arrived Tuesday afternoon, but the doors were locked. At the two Bennigan's restaurants on Michigan Avenue -- reportedly the top grossing restaurants in the entire chain -- the signs went up Tuesday morning: "Sorry we are closed." The same is true for the Bennigan's in Calumet City where the general manager was told in a phone call early Tuesday to close up shop.

Even employees were shocked to see the signs go up this morning. Many Bennigan's restaurants across the country are closed as the company files for bankruptcy.

"I have some more employees that were getting off their shift. I told them and they immediately just started crying because most of them have children. Most of them are single mothers. And they were just devastated," said Alphonso Prince, Bennigan's Calumet City G.M.

"It's a surprise for me because I've got 7 1/2 years working for this place. So, now, I don't know, what can I do?" said Cesar Morales, Bennigan's cook.

The owner of the Bennigan's chain has said little about its decision to file for Chapter 7 bankruptcy. It had attempted to restructure its debt at a time when the poor economy was hurting members of the casual dining industry. The restructuring apparently failed and Bennigan's is closing roughly 160 corporate-owned restaurants nationwide.

"The company that owned the corporation stores, yeah, that might be going away. But the franchise company doesn't don't go away," said Larry Briski, Bennigan's franchisee.

There are about 140 Bennigan's restaurants owned by franchisees, a number in the Chicago area, that are not part of the bankruptcy action. They will remain open under the name Bennigan's.

But employees at the corporate owned Bennigan's have lost their jobs and don't know if they'll even get their final paycheck.

"You got to pay your bills and have rent, food, you have to live. And now what are these people going to do? Bennigan's aren't saying anything," said Loretta Woods, Bennigan's customer.

Chapter 7 bankruptcy means that the Bennigan's corporate restaurants that are being closed will be liquidated and sold off.

Bennigan's owner in Texas issued only a very brief statement Tuesday. It said that it has about 50 creditors and after paying off all of its administrative expenses, it will have no money to pay its creditors. So it seems as though those employees who are losing their jobs are likely to go without that final paycheck.


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