Monday, September 15, 2008
Lenders ease S&A liquidation as 60 stores are auctioned
Source: Nation's Restaurant News
DALLAS (Sept. 15, 2008) An auction under way of about 60 shuttered Bennigan's and Steak & Ale restaurants is set to close by the end of October, with rents and other expenses on the properties to be paid in the meantime by lenders such as GE Capital Solutions, Franchise Finance.
According to court documents, Scottsdale, Ariz.-based GE Capital is guaranteeing at least $200,000 of its proceeds from the assets auction to the bankruptcy estate of S&A Restaurant Corp., the owner of the Bennigan's and Steak & Ale casual-dining brands. GE Capital also agreed to pay rents and other expenses for the approximately 30 mortgages it holds throughout the auction time. Chicago-based NRC Realty Advisors LLC is facilitating the sale of assets.
The agreement to cover certain expenses was made "in an attempt to preserve value at these locations," GE Capital said in a statement to Nation's Restaurant News.
S&A filed for Chapter 7 liquidation in July. At that time, Bennigan's franchisees said they would continue to operate their stores and would work with the company that took control of franchise rights to provide the support services that had been provided by S&A.
Other unnamed lenders to S&A made agreements similar to the arrangement with GE Capital, and agreed to pay rent and expenses on properties they hold, pending a sale.
NRC Realty had not returned calls seeking comment by the time of this posting.
Some Bennigan's franchisees, which together operate about 130 restaurants from the once 355-unit U.S. system, have said they were interested in purchasing shuttered units that could successfully be reopened. The franchisees are being supported by Bennigan's Franchising Co. LP and S&A creditor Atalaya Capital Management.
Court documents showed that the lease agreements to the majority of the 220-plus shuttered Bennigan's and Steak & Ale locations have been rejected, or effectively terminated, by the debtor and turned over to the landlord. For more information, isit www.nrc.com/820 or call (866) 447-0672.