by Calculated Risk on 6/04/2008 09:25:00 AM

From the WSJ: Bennigan's Owner In Crucial Credit Talks (hat tip Geoffrey)

The owner of national casual-dining chains Bennigan's, Ponderosa and Steak and Ale is in talks with its major lender GE Capital Solutions in an effort to stave off a possible bankruptcy filing ...

The problems at Metromedia show just how difficult life has become for casual-dining chains. Consumers are cutting back on discretionary spending. That comes as food prices for everything from corn to steak are on the rise. Many of the companies are also highly leveraged, which is pushing them to seek protection from creditors.

Earlier this year, the parent companies of the Bakers Square, Village Inn and Old Country Buffet filed for Chapter 11 bankruptcy protection, citing fall sales and rising food costs. A host of other chains -- from Outback Steakhouse to Ruby Tuesday's -- are also struggling.

Casual dining is a discretionary expense and is frequently one of the first expenses that consumers reduce during hard times.