PLANO Texas Metromedia Restaurant Group, parent to the Bennigan's, Ponderosa and Bonanza brands, has denied a report that it was ready to file for bankruptcy and said Wednesday that it was working with its lenders to restructure its debt.
The Wall Street Journal reported earlier Wednesday that MRG was in talks with lender GE Capital Solutions to avoid a possible bankruptcy filing. The newspaper said MRG had violated several terms of its lending agreement, and that GE Capital had declared a default and accelerated payments.
However, in a statement issued to Nation's Restaurant News, MRG officials said the company "has neither filed for bankruptcy nor prepared a bankruptcy filing."
"Similar to other members of the casual-dining industry, current economic and industry trends have adversely affected the group's overall financial performance," the company said in the statement. "As a result, Metromedia Restaurant Group is currently in the process of formulating a proposal to present to its lenders to restructure its indebtedness and alleviate such trends."
The Journal's report comes a week after MRG's chief executive, Clay Dover, resigned, citing differences with the restaurant company's ownership.
Given the downturn in the economy, a number of restaurant companies have had to restructure their debt because of weaker operating results and strict lending terms. Those include Ruby Tuesday, Perkins & Marie Callender's, Krispy Kreme, and Sagittarius Brands, owner of Del Taco and Captain D's.
MRG, a unit of billionaire John Kluge's Metromedia Co., also owns The Tavern concept and the Steak and Ale steakhouse chain. The company has more than 700 restaurants.