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Eatery Chain Files for Bankruptcy : Regrouping: Southland restaurants owned by Specialty will stay open, but closures are planned in other states.

September 01, 1993|PRADNYA JOSHI | TIMES STAFF WRITER

Specialty Restaurants Corp., an Anaheim-based chain with 55 restaurants nationwide, Tuesday filed to reorganize under Chapter 11 of the bankruptcy laws, a company official said.

The company does not plan to close any of its restaurants in Southern California, but will close or sell some unprofitable restaurants in states including Texas, New York and Florida, said William Tallichet, general manager of the firm's Ports O' Call restaurant in San Pedro.

The company's other Southland eateries include Odyssey in Grenada Hills, Luminarias in Monterey Park, Shanghai Reds in Marina del Rey and Orange Hill in Orange.

"The primary restaurants in Southern California have always been the most successful, profit-making operations of our restaurants," Tallichet said.

In addition to closing or selling some restaurants, the company will use the reorganization period to sell other assets, such as its collection of vintage airplanes and some undeveloped land, said Tallichet, son of the chairman and president of the parent company, David Tallichet Jr.

In June, the company recorded its first annual loss in the 35 years his father has run the company, Tallichet said.

He said the loss has made it difficult for the company to manage a restructuring and it prompted the bankruptcy filing, which will protect it from creditors while it reorganizes.

In addition, lost revenue from a fire that destroyed the the Castaway restaurant in Burbank on June 29 hurt the company financially, Tallichet said.

But that restaurant has been operating a banquet facility and is to be reopened in 18 to 24 months, he said.

The bankruptcy filing "is a very good thing" for the company, Tallichet said, because eventually it will leave the company more secure financially.

The chain plans to emerge from Chapter 11 in four to six months, Tallichet said.

The privately held company has annual revenue of between $150 million and $200 million and employs about 7,000 people, according to Standard & Poor's.

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