Long known for deep-dish, Chicago-style pizzas, Uno moved in recent years to a more expansive menu of grilled, fried and sautéed fare, including Angus beef steaks and Bolognese pasta, and drinks such as pomegranate margaritas.Īnother chain trying to negotiate more financial breathing room is the Cypress, Calif.-based Real Mex Restaurants Inc., which owns the Chevys, El Torito Grill, Acapulco Mexican restaurants and other regional chains, according to three people familiar with the talks. "Those other restaurants that filed, their concepts haven't remained relevant. In the last few months, sit-down chains such as Bennigan's, Steak and Ale, and Vicorp Restaurants Inc.'s Bakers Square and Village Inn chains have filed for liquidation or bankruptcy protection, frequently moving to shutter hundreds of sites and cut thousands of jobs. They have many older sites and older brands, but limited funds to update menus or buildings.ĭuring the first half of 2008, same-store sales at midpriced sit-down restaurants declined an average of 1.1%, according to Knapp-Track, which measures sales at 10,000 restaurant outlets. At the same time, the companies are managing heavy debt loads placed on them by private-equity funds. All have had earnings slow as diners cut back on eating outside their homes. These chains, which combined have about 1,000 sites across the country and 40,000 employees, also face difficulties. Other chains, such as Chevys Fresh Mex and the home-style Perkins and Marie Callender's chains are also in talks with their lenders, say several people familiar with the companies. Same-store sales were down 7.7 percent in the first quarter of 2008, according to Moody's Investors Service. Uno sales held up until late 2007, but have slid the last three quarters. "We are not in any imminent danger of filing for bankruptcy," Mr. Uno has hired investment banking firm Houlihan Lokey Howard & Zukin as its financial adviser to negotiate with bondholders. Said his chain has 30 days before it will be in default and will "avail ourselves of that time as we try to get an appropriate balance sheet for the company." A default often allows lenders to impose tighter terms or higher interest rates, moves that further squeeze an already struggling company. Uno's decision not to make the payment reflects its tight liquidity. It plans to defer that payment and is in talks with six bondholders for a waiver or an amendment, say two people familiar with the talks. Uno faces a $7.5 million interest payment due Friday on its $141 million in senior secured notes.
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