A regional upscale steak house chain, started in Seattle in 1964, has filed for bankruptcy, unable to continue because of debt. One part that I found intreresting:
"The company said it has $53.1 million in secured debt and $13.2 million reserved for outstanding letters of credit.
As of Dec. 1, ARG had $7 million in trade debt, $15.2 million in outstanding gift cards and certificates and $2.9 million in rent and other property costs. In addition, ARG said it owes $2 million in capital lease obligations and $3.3 million in workers’ compensation and liability insurance "
They are liable for over 15 million in gift cards?! This means they sold the cards and instead of putting the money in trust, they spent it. Who do they think they are? The US Govt?
This would be a great time to start an upscale steak house near where these are going under. Space is cheap, help is unemployed right now, you'd have no debt service, and food suppliers will do vendor financing. It has never been a better time to start a business.
Friday, January 16, 2009
Black Angus Goes Down
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