SEC Filing Raises Questions About Restaurant Group

American Restaurant Group’s recurring losses from operations “raise substantial doubt about its ability to continue as a going concern,” the firm’s accountants warned in a report filed Monday with the Securities and Exchange Commission.

The cautionary notice, reported in a regular SEC filing, said that the company suffers from a “net capital deficit, has a sinking fund payment of $41.5 million due Sept. 15, and may be required to renegotiate its senior debt if it cannot meet amended covenants.”

American Restaurant Group, a privately held company, operates 247 restaurants. According to the filing, “substantially all” of the company’s assets are pledged as guarantees for the company’s debt.

In the filing with federal regulators, American Restaurant Group said that it is “highly leveraged” and is pursuing sales of restaurants in order to repay the $41.5-million debt. If sales aren’t forthcoming, according to the filing, the company believes that it could “otherwise restructure its debt.”

The company reported a $38.5-million net loss and $445 million in sales during the year ended Dec. 30, according to the filing. A year earlier, the company reported a $39.7-million net loss on $446 million in revenue.

American Restaurant Group operates the Black Angus, Grandy’s, Spoons and National Sports Grill chains.