Bankruptcy Filing Is a Bummer for Bennie’s

The owner of the popular Bennie the Bum’s all-night diner in Laguna Beach could use some spare change.

Edward Campellone, president of the quirky, ‘50s-style diner, said Thursday that his company has filed for bankruptcy protection from creditors, blaming the economy for slumping sales of his popular chili and hamburgers.

Bennie the Bum’s Diner Corp., in a filing this week in federal bankruptcy court, lists debts of $409,855 and assets of $165,380. The Chapter 11 filing provides the company protection from its creditors while it attempts to reorganize its finances.

The court papers list the company’s major creditors as Perry Morris Corp. in Irvine, owed $125,000 for leased kitchen equipment, and Sunwest Bank, owed $19,089 for a loan.

The diner--a local legend of sorts--is known for Campellone’s frequent wisecracking with customers and for a waitress who sometimes dances on tables when customers punch up “Wild Thing” on the jukebox.

Campellone, who said he has not been actively running the diner for several months, blamed the loss of business in part on the man who assumed daily operation of the restaurant in February, 1990. The new operator, Robert Lincoln of Mission Viejo, stopped sending lease payments, Campellone said.

Lincoln could not be reached for comment.

Asked about the details of his bankruptcy filing, Campellone initially denied he owed Sunwest Bank any money. He later called back after talking with his attorney and said the bankruptcy papers were correct.

“My attorney said (that) at least I didn’t seven-out on them,” Campellone said, referring to a Chapter 7 bankruptcy liquidation that can lessen creditors’ chances of collecting.

Two former employees have also been trying to collect money from Campellone. They worked as waiters at the diner two years ago and said Campellone often failed to meet his payroll.

But Campellone contended that he always paid his employees. “I’ve got employees who’ve been working here six years,” he said.

Campellone is a former owner of two barbecue restaurants in Huntington Beach and Fountain Valley, JEC Fat Boys, which he said he sold six years ago. The bankruptcy filing lists JEC as a 20% owner of Bennie the Bum’s Diner Corp.

Campellone is also part owner of Bennie the Bum’s Chili Corp., formed last year to sell canned chili at Anaheim Stadium and in grocery stores and fast-food restaurants. Campellone said he doesn’t know how the chili sales are doing.