Gary Reinert’s Damon’s Grill Files for Bankruptcy a Week After Sister Co. Max & Erma’s - CBL

By Citybizlist Staff

PITTSBURGH -- Just a week after sister brand Max & Erma's filed for Chapter 11 bankruptcy, 50-restaurant barbeque chain Damon's Grill has followed suit.

According to a report by Nation's Restaurant News, both restaurant chains are owned by G&R Acquisitions Inc., led by Pittsburgh-based developer Gary Reinert Sr. Both also are based in Columbus , Ohio .

Reinert's spokesman, Tracy Coats, said Damon's filed for bankruptcy protection to prevent its stock from being taken over by its creditor, National City. The bank is now part of Pittsburgh-based PNC Financial Services Group Inc.

"Damon's cash flows very nicely, and you want that cash flow to pay for Max & Erma's debt," Coats was reported as saying.

The report also said documents filed in the western Pennsylvania bankruptcy court show Damon's assets and liabilities at between $1 million and $10 million.

The News said Damon's equity had been used as collateral for a loan to 105-unit casual dining chain Max & Erma's, which was $23 million in default in 2008.

Max & Erma's intended to pay back its defaulted loan with the proceeds from the sale of corporate restaurants to franchisees. Reinert had negotiated more than $25 million in such deals, but the financial market meltdown dried up financing for the potential buyers.

Reinert bought Damon's in 2008. Since then, the number of locations has been slashed from 80 to 36 franchises and 13 corporate restaurants.

Nation's Restaurant News article: http://tinyurl.com/ylcnbxg

Also at Citybizlist, see:

Damon's Grill Completes Restructuring, Launches Growth Strategy