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Metromedia Steakhouses

The firm represented Metromedia Steakhouses Company (“MSC”), a Plano, Texas-based operator of a chain of "all you can eat" buffet restaurants under the Ponderosa and Bonanza brands that offer soups, salads, steak, chicken, and seafood. MSC filed for chapter 11 due to declining sales. Under the plan of reorganization, parent Metromedia provided three loans to support the reorganized debtor: A $9.3 million loan that will replace MSC's prepetition term loan and revolver (bought by Metromedia before MSC's bankruptcy); a $5.84 million exit financing that would pay off the debtor-in-possession loan supplied by Metromedia; and a $4.68 million revolver described as a working capital line. Unsecured creditors were provided two options for recovery under the plan: payment from a litigation trust or equity in reorganized MSC.