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What company now controls Bennigan’s trademarks and franchise agreements and what Metromedia companies are being liquidated? Pursuit of these questions over the last few days by Blue MauMau (BMM) has resulted in answers: but they have been confusing. In tracking business stories, it is important to know which business actually has what. Otherwise in the news frenzy, franchisees and the press can be fooled by slight of hand.
Nation's Restaurant News broke the news on the new owners a few hours before Blue MauMau. This journal was busy chasing the same information from a different source and sidetracked for a time into thinking the buyer was another private equity firm that is known for its predilection for distressed franchise chains. NRN writes:
"Atalaya Capital Management LP . . . and CRG Partners . . . have taken over the management of the Bennigan's Grill & Bar franchise system in the wake of the Chapter 7 bankruptcy filings for court-supervised liquidation this week by S&A Restaurant Corp. and some affiliates, a franchisee here [Baton Rouge] said."
Judging from that excerpt, has the Bennigan's and Steak & Ale holding company, S & A Restaurant Corp, filed Chapter 7 to liquidate? Or is it just liquidating some subsidiaries?
CRP Group, a turnaround specialist that is now working closely with the franchisees and Atalaya, says that Atalaya Capital Management were senior lenders to S & A Restaurant Corp. When Bennigan's- and Steak & Ale-related companies were forced to file Chapter 7, Atalaya elected to vote their stock and to install a new board and management team in the remaining companies. They didn't like the direction in which the company was heading—liquidation.
That means S&A Restaurant Corp is intact and has changed management.
But attorneys Kane Russell Coleman & Logan specifically name S & A Restaurant Corp. on a list of debtors.
When called on Friday, public relations consultant Leah Templeton, a company spokesperson, could not answer questions about the closings. She no longer represented S & A Restaurant Corp. However, on Tuesday she did. At that time she told the Wall Street Journal:
"Future decisions regarding the affairs of the debtor companies will be determined and administered by a bankruptcy trustee"
A court document (pdf) says that "Bennigan's and Steak and Ale," the brand names and not the company names, "have filed liquidation cases under Chapter 7 of the Bankruptcy Code." To confuse matters more, "S & A Restaurant Corp." appears in the list of debtors to be administered by the trustee.
Robert Cohen, an owner of a Bennigan's in Lenox, Massachusetts says, "The franchise entities are still alive and kicking, and a new company has moved in to grow the [franchise] brand."
" . . . he [Cohen] received a communication from Atalaya Administrative LLC, which is establishing a temporary umbrella organization for the franchise restaurants. 'The tone of the e-mail is positive,' said Cohen." —Berkshire Eagle
Meanwhile, turnaround specialist CRG Partners thinks it and Atalaya have the right to use the trademarks. It is working with the trustees for access to records and on other matters.
Has the ownership of the intellectual property rights for Bennigan's and Steak & Ale not changed hands? Are the franchisees in a position to do anything?