Semantics, semantics, semantics. If you've been following Wednesday's Metromedia Steakhouses Co. LP Chapter 11 filing, you may have witnessed how semantics created a confusing few days. Why? MSC's corporate structure apparently confused some journalists (or their editors) to the point that it was incorrectly reported all over the place that the Ponderosa and Bonanza buffet chains were both bankrupt. In case you're still wondering, they're not. At least not entirely.
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When the press release announcing MSC's bankruptcy hit the wire on Wednesday, the facts involving MSC -- from what it owned to what the filing pertained to -- were murky to begin with. It only got worse when MSC said it was the owner of the Ponderosa and Bonanza buffet chains, but that Ponderosa and Bonanza weren't bankruptcy.
"Ponderosa Franchising Company, Ponderosa International Development, Inc. and Bonanza Restaurant Company, which are subsidiaries of [Metromedia] and are the franchisors of the Ponderosa Steakhouse and Bonanza Steakhouse brands, were not included in the Chapter 11 filing," the press release said.
Huh?
Not surprisingly, newspaper stories got it wrong. The first sentence of an article by the Orlando-Sentinel noted, "Another iconic American restaurant chain has gone bankrupt." Even The Wall Street Journal wrote: "Two of the country's oldest family steakhouses, Ponderosa and Bonanza, filed for Chapter 11 bankruptcy protection."
What escaped these articles, and others published across the country, is that MSC operates only one-third of the Ponderosa chain, and none of the Bonanza chain. In total, in fact, all the hullabaloo involved 50 MSC-owned Ponderosa restaurants and no Bonanza locations.
With so much turmoil in the financial markets and the economy as a whole, clarity can go a long way toward calmness. When trying to communicate with the public and the press, companies such as MSC that are filing bankruptcy in such troubled times may want to remember that. It may save them, their creditors and their other stakeholders a lot of unnecessary heartache and confusion. - Ben Fidler
