July 29 (Bloomberg) -- The Bennigan's and Steak and Ale restaurant chains, owned by Metromedia Restaurant Group, closed 292 locations and sought permission to liquidate under bankruptcy court protection.

The closely held chains listed assets totaling as much as $778.9 million and debt of as much as $324.2 million in 38 Chapter 7 petitions filed by affiliates today in U.S. Bankruptcy Court in Sherman, Texas.

Metromedia is part of billionaire John Kluge's Metromedia Co. group. In June, the Plano, Texas-based chain operator said it would ask lenders to restructure its debt as the slowing economy hurt earnings.

Two other Metromedia chains, Bonanza Steakhouse and Ponderosa Steakhouse, didn't seek bankruptcy. The chains' 138 franchise stores in the U.S. and abroad will remain open, according to a statement e-mailed today from Bennigan's Franchising Co.

The affected Bennigan's locations represent about 0.5 percent of the U.S. bar-and-grill sector, Steven Kron, a Goldman, Sachs & Co analyst in New York, said in a note after the filing. There are 292 corporate Bennigan's locations and 55 Steak and Ale restaurants, according to the note.

Quick Closings

``These closings -- particularly the quick manner in which they occurred -- speak to the challenges the restaurant industry is currently facing,'' Kron said.

Chapter 7 proceedings let companies liquidate their assets while being protected from creditors. In June, Metromedia denied it was preparing a bankruptcy filing after the Wall Street Journal reported it violated lending agreements with GE Capital Solutions.

The company's chief executive officer, Clay Dover, resigned a week before the report, citing a difference of opinion about the direction of Metromedia, Restaurant News reported in June.

``Similar to other members of the casual dining industry, current economic and industry trends have adversely affected the group's overall financial performance,'' the company said June 4 in an e-mailed statement.

Bennigan's, which has run Irish-themed taverns since 1976, has more than 310 locations in about 10 countries, according to a company statement. Steak and Ale was founded in Plano in 1966.

A message left at the Bennigan's headquarters wasn't immediately returned.

Buffets Holdings Inc., the largest U.S. operator of buffet- style steak restaurants, filed for Chapter 11 protection from creditors on Jan. 22. The company ran 626 restaurants in 39 states, including Ryan's, Fire Mountain and Tahoe Joe's Famous Steakhouse.

Commissary Operations Inc., a food supplier for restaurant chains doing business under the name Chairman's Choice Foods, filed a Chapter 11 petition on July 22 in Nashville, Tennessee. The company blamed a drop in demand and rising fuel costs.

The case is In re S & A Properties Corp., 08-41899, U.S. Bankruptcy Court, Eastern District of Texas (Sherman).

To contact the reporters on this story: Erik Larson in New York at elarson4@bloomberg.net; Dawn McCarty in Wilmington, Delaware, at dmccarty@bloomberg.net.

Last Updated: July 29, 2008 19:14 EDT