Bennigan's declares bankruptcy, closes some stores

Bennigan's, long a staple among chain restaurants in the suburbs, abruptly declared bankruptcy and shuttered many of its stores Tuesday.

The closings affected the restaurants that are owned directly by the company, not franchises. Sixteen Irish-themed Bennigan's Grill and Taverns dot the Chicago area, from the Loop to Batavia.

The corporate-owned restaurants are now closed, leaving their trademark green signs dark and scores of waitresses, cooks and other staff without jobs, as a bleak economy batters the restaurant business. The closed stores include those in Lake Zurich, Schaumburg, Deerfield, Batavia, St. Charles, Oakbrook Terrace and Calumet City.

Several signs covered the door of the Schaumburg location on Higgins Road Tuesday, including signs directing co-workers to meet and discuss the closing; "wait staff wanted" and "now hiring" signs posted from other area restaurants; and directives to longtime customers of a waitress named Sue to meet her at another restaurant. One typed letter taped on the inside of the locked door reads:

"To all of my Bennigans co-workers:

I received a phone call at 1:43 a.m. Tuesday July 29 telling me that all Bennigans have closed as of midnight last night. I don't have many answers for you at this time... but I do want to tell you how very much I value the hard work and many long hours that you have put in here with me. Thank you so much for being part of our team at Schaumburg. I will miss you.

I will be at Stonewood on Monday night at 8 p.m. I hope you will join me. I will try to have more answers regarding paychecks, etc. I will bring any unclaimed tip share with me at that time.

For your information, our Corp. office phone # is 972-588-5000."

Another sign reads, "Sue's regulars: She would like to see you. Please come to Stonewood Monday, Aug. 4 at 8 p.m."

Roberto Perez, 47, of Schaumburg used to work at the Schaumburg restaurant and stopped by Tuesday night to see if it was still open and what became of his former co-workers.

"It's too bad they are closing every store whether they are making money or not," Perez said, adding that the Schaumburg location always brought in good business. "It's always sad to see... like Sue here, she's been here 20-something years," said Perez, who worked part-time at the restaurant for about two years. "These corporations, all they care about is money. I work in finance now so I know," he said.

But some franchise stores remain open, including one in Elgin.

Bennigan's privately-held corporate owner filed bankruptcy early Tuesday, according to a statement released by Texas-based Metromedia Restaurant Group, which also owns Steak and Ale Restaurants. The corporation has not provided information about specifically which restaurants are closed and which remain open as franchises.

The shut down follows moves by the nationwide chain to restructure debt and consumers reduce spending on dining out.

The hardest hit restaurants have been casual chains and bar and grill restaurants, which charge higher prices than fast food and other quick-service chains. Bennigan's has been prominent in this sector since the mid-1980s.

Morningstar analyst John Owens said several chains expanded quickly in recent years, making it difficult for customers to differentiate between them and forcing many to cut prices for a competitive edge.

"Bennigan's was the weakest of the major players," Owens said.

Richard Tiedt, general manager of the Elgin Bennigan's in the Holiday Inn, said he was upset the corporation shut down without notice.

"This is a complete shock to me," he said. "The corporate offices are not responding to my phone calls or e-mails to let me know what is going on. They should have let us know this would happen."

Customers called his restaurant after hearing news of the shutdowns, he said, and delivery companies asked whether or not they should continue delivering.

"It really puts us in a tough position," he said. "We just want to tell everyone to come on in and eat. We are still here."

Managers of suburban Bennigan's restaurants in Lake Zurich, Deerfield and Calumet City made early morning announcements to the media that they were shutting down. Restaurants in Batavia, Oakbrook Terrace and St. Charles were also found closed Tuesday.

But little information was available publicly from corporate headquarters on exactly which Bennigan's in the Chicago area remain open.

After releasing the sparse announcement early Tuesday, corporate officials refused to comment from their headquarters in Texas.

Cory Brumfield, an assistant manager of the restaurant in Calumet City, said he was contacted at 1:30 a.m. by corporate officials saying the restaurant would not open today.

"I went through this when Chichi's Restaurant closed down a while back," he said. "They give you no notice and just shut their doors."

An employee who answered the phone in Deerfield early Tuesday said, "Formerly Bennigan's, may I help you?"

Bennigan's was founded in 1976. The restaurant has locations in 32 states.

The companies owned by Metromedia of Plano filed for bankruptcy protection in the Eastern District of Texas, less than two months after the company publicly said it wouldn't.

In June, Metromedia Restaurants said it was formulating a proposal to present to its lenders to restructure its debt, but was not preparing to file for bankruptcy.

Daily Herald news services contributed to this report.