Metromedia Steakhouses, parent file joint plan of reorganization

By Caroline Salls

Pittsburgh, June 22 - Metromedia Steakhouses Co., LP filed a plan of reorganization and related disclosure statement Friday with the U.S. Bankruptcy Court for the District of Delaware.

According to the disclosure statement, the plan proponents include Metromedia Steakhouses and debtors JOST Restaurant Financing, Inc., Puerto Rico Ponderosa, Inc. and PON Realty I, Inc., as well as ultimate parent company and pre-bankruptcy and post-bankruptcy lender Metromedia Co.

Creditor treatment will include:

• Holders of priority claims will be paid in full in cash;

• Secured claims will either be reinstated or remain unaltered or holders will be paid in full in cash;

• Holders of general unsecured claims against Metromedia Steakhouses and PON will receive payment from an MSC-PON creditor trust, which will include an $850,000 up-front unsecured creditor payment, a $3.65 million 7½% note. The company said it believes these creditors will receive cash over time equal to about 50% of their claims.

However, any holders of general unsecured claims against Metromedia Steakhouses and PON will have the option to receive equity in the reorganized company instead of the creditor trust distribution;

• Holders of convenience class claims will receive the lesser of 100% of their claim or $300 in cash;

• Holders of general unsecured claims against JOST and Puerto Rico Ponderosa will either be paid in full in cash or the rights to their claims will be unaltered;

• Holders of interests in Metromedia Steakhouses will receive no distribution; and

• Holders of interests against the other debtors will retain their interests.

The parent company has agreed to provide $5.1 million in exit financing and a $9.3 million replacement loan on Sept. 1, as well as a $4.15 million working capital line.

In addition, Metromedia has agreed to receive equity in exchange for its $258 million in general unsecured claims, rather than participate in the MSC-PON creditor trust up-front payment and note.

The parent company will also guarantee the first $359,867 payment on the creditor trust note.

The disclosure statement hearing is scheduled for July 28.

Metromedia Steakhouses is a steakhouse company based in Plano, Texas, that operates restaurants under the names Ponderosa Steakhouse and Bonanza Steakhouse. The company filed for bankruptcy on Oct. 22, 2008. Its Chapter 11 case number is 08-12490.

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