Ponderosa Steakhouse owner files for Chapter 11

The owner of the Ponderosa and Bonanza Steakhouse brands said Wednesday it was filing for Chapter 11 bankruptcy protection.

Metromedia Steakhouses Co. L.P., based in Plano, Texas, said it filed voluntarily under Chapter 11, which allows a company to restructure and stay in operation. The petition was filed in the U.S. Bankruptcy Court for the District of Delaware on Wednesday.

Metromedia Restaurant Group is a part of Metromedia Co., owned by billionaire John Kluge, that has interests in entertainment, radio stations and medical equipment.

The filing is the company's second in nearly three months. At the end of July, a different subsidiary of Metromedia — S&A Restaurant Corp. — filed for Chapter 7 bankruptcy liquidation. S&A owned the Steak & Ale and Bennigan's brands.

Metromedia did not immediately return phone calls seeking comment.

According to the filing Wednesday, Metromedia Steakhouses entered bankruptcy with assets of $1 million to $10 million and debt of $100 million to $500 million. Its creditors include GE Capital, which recently said it is being more cautious in its lending to restaurant franchisees.

The brand's franchisees were not included in the filing.

Metromedia Steakhouses said in a statement that it will "reorganize around its franchise operations and a profitable core of company-operated restaurants."

Restaurants have been hit hard by a downturn in consumer spending and tight credit markets, which have made lenders more cautious. High commodity costs have also strained balance sheets. Numerous smaller restaurant chains have filed for bankruptcy in recent months, including privately owned Vicorp Restaurants Inc., which operates the Village Inn and Bakers Square chains.

In its statement, Metromedia said it has already received a debtor-in-possession financing commitment from one of its affiliates that now acts as a secured creditor. Such loans are meant to support a company while it is under bankruptcy protection.

Separately, private-equity company Atalaya Capital Management said Wednesday it received approval from a Texas bankruptcy court to buy the Steak & Ale and Bennigan's brands.

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