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Damon's Files for Chapter 11 Bankruptcy Protection: Sysco, USF Among Top Creditors

COLOMBUS, OHIO (Oct. 29, 2009)—G&R Acquisition-owned Damon's International Inc. filed for Chapter 11 bankruptcy protection thiw week in U.S. Bankruptcy Court. Max & Erma's Restaurants Inc., also owned by G&R, filed a Chapter 11 reorganization bid just last week.
 
Damon's, founded in 1979, has 50 locations in 15 states and the United Kingdom. The Chapter 11 filing is a move to reorganize debts while the business continues to operate. At the higher-end of casual dining, with check averages above competitors, the chain has struggled with sales for years, before the sale to Reinert and the recession.

Among Damon’s largest unsecured creditors are Jessup, Md.-based Sysco Baltimore, a division of Sysco Corp., and North Star Foodservice in Twinsburg, a division of U.S. Foodservice Inc. Each is owed more than $500,000. 

G&R, after acquiring Damon’s last September from Alliance Development Group LLC of Charlotte, N.C., installed David Brown of Pittsburgh as the chain’s CEO and announced plans to sell some company-owned restaurants to franchisees, a similar strategy that it was implementing at Max & Erma’s.

G&R has struggled with mounting legal and financial challenges while casual-dining spending dropped. The company this year closed several Damon’s restaurants, including Ohio locations in Delaware, Hilliard, Stow and Lancaster. G&R, Reinert and its dining chains were hit with $15.9 million in cognovit judgments secured by National City Corp. within the past month.

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