RETAIL : Restaurant Enterprises Group Details Revenue Woes in Recent SEC Filing

Restaurant Enterprises Group executives won’t comment on its own financial status or on plans by Foodmaker Inc. in San Diego to acquire REG. But REG’s dire financial straits are spelled out in detail in a recent Securities and Exchange Commission filing.

Slowing revenues, which REG blames partly on the severe recession in California and partly on stalled liquor sales, “raise substantial doubt about the company’s ability to continue as a going concern for a reasonable period of time,” according to the recent SEC filing.

REG, based in Irvine, is attempting a complicated financial restructuring, but “the company may be forced to file for protection under Chapter 11” of the U.S. Bankruptcy Code, according to the SEC filing.

REG also breaks out its previously announced plan to divest 169 “non-strategic” restaurants. On the block are 49 dinner houses and 72 Mexican dinner houses, most of them outside REG’s stronghold in California and Arizona. The restaurants to be sold generated a $21.5-million loss on $242 million in revenue for 1992.