Family Restaurants Reorganizes Its Top Ranks : Management: A new executive will run the troubled Chi-Chi’s chain, based in Irvine. Chief operating officer is promoted to president.

Family Restaurants Inc. on Tuesday said it has reorganized its management ranks and hired a new executive to run the Irvine-based company’s troubled Chi-Chi’s Mexican-style restaurant chain.

Chief Operating Officer Kevin Relyea was promoted to president of Family Restaurants and will be responsible for the family-style restaurants, including the Carrows and Coco’s chains. Jack McGregor, an executive with a Detroit-area corporate turnaround firm, was named president of Chi-Chi’s, the company’s Louisville, Ky.-based Mexican-style restaurant chain.

Earlier this month, privately held Family Restaurants reported that second-quarter earnings, before interest, depreciation and taxes, fell 52% to $13.6 million, and that sales at restaurants open for at least a year fell 5.9%.

Moody’s Investors Service Inc. recently downgraded Family Restaurants’ 9.75% notes, and Duff & Phelps noted that the company was in violation of a bank credit agreement.

Family Restaurants Chief Executive Officer Larry Ramaekers, in a prepared statement released Tuesday, said the company’s family restaurant division produced operating profits during 1994. But Ramaekers, who joined Family Restaurants on July 31, acknowledged “disappointing” results for Chi-Chi’s.

Chi-Chi’s will shift its focus to “new marketing and menu programs and competitive store openings,” Ramaekers said. “Chi-Chi’s continues to be America’s No. 1 restaurant chain serving Mexican food and must try to capitalize on this market position.”

In a recent filing with the Securities and Exchange Commission, Ramaekers indicated that the Chi-Chi’s operation might be sold. Ramaekers on Tuesday declined to elaborate on that possibility.

Family Restaurants also announced several other management changes. Chief Financial Officer Robert Trebing will handle purchasing functions while Executive Vice President Roger Chamness will handle finances for both Chi-Chi’s and the family restaurant division.

Former Family Restaurants President Barry Krantz, Chief Administrative Officer Patti Johnson, Executive Vice President Mark Archer and Vice President Pam Robertson have left the company, Ramaekers said.

Family Restaurants operates about 700 restaurants in 33 states.