RUNNING OUT OF CLUCK?; BOSTON CHICKEN STOCK TAKES BIG HIT.Byline: Stacy Roth Bloomberg News Boston Chicken Inc. shares lost more than one-third of their value after its independent auditor Independent Auditor An external auditor with a certified public accounting designation that qualifies him or her to provide an auditor's report. Notes: These auditors aren't affiliated with the company being audited. expressed doubt that the operator of Boston Market Boston Market (known before 1995 as Boston Chicken), headquartered in Golden, Colorado, is a chain of American fast-food restaurants. Founded in December 1985 in Newton, Massachusetts, the chain grew rapidly in the early and mid-1990s, filed bankruptcy in the late 1990s, and restaurants can continue as a going concern. The auditor, Arthur Andersen For the U.S. Supreme Court case commonly known as Arthur Andersen, see . Arthur Andersen LLP, based in Chicago, was once one of the "Big Five" accounting firms (the other four are PricewaterhouseCoopers, Deloitte Touche Tohmatsu, Ernst & Young and KPMG), performing LLP LLP - Lower Layer Protocol , stated its opinion in a Boston Chicken regulatory filing late Thursday. The operator of 1,150 restaurants said earlier this month that its auditor expected to make known its concerns about the chain's viability. The report heightened concern that the once-highflying company may have little choice but to file for Chapter 11 protection, analysts said. Boston Chicken has said it's not considering bankruptcy, but that it needs to sell assets and renegotiate terms with lenders. ``Is Chapter 11 on the horizon? Absolutely yes,'' said Peter Chapman of newsletter publisher Bankruptcy Creditors Service Inc. ``They don't have enough cash to save the company and they're no longer qualified to borrow a dime.'' Boston Chicken fell 1 3/16, or 37 percent, to 2 1/32 in trading of 13 million, ranking it the third-most-active U.S. issue. The shares, which are down 88 percent the past year, earlier fell to a record low of 1 11/16. Shareholders typically rank behind most other creditors such as debt holders after a company enters bankruptcy proceedings bankruptcy proceedings n. the bankruptcy procedure is: a) filing a petition (voluntary or involuntary) to declare a debtor person or business bankrupt, or, under Chapter 11 or 13, to allow reorganization or refinancing under a plan to meet the debts of the party . ``The company has absolutely no plans to file for bankruptcy protection,'' said Boston Chicken spokeswoman Karen Rugen, adding that the Golden, Colo.-based company isn't closing any stores. The stock peaked at 41-1/2 in December 1996. Still, a Chapter 11 filing could help Boston Chicken cut costs, analysts said. It would allow the company to renegotiate leases, which are some of the highest in the restaurant industry, and keep lenders at bay while it devises a plan to make money. Boston Chicken said in its 8-K statement filed Thursday with the Securities and Exchange Commission that sales and cash flow at its restaurants are running below expectations amid marketing miscues, such as excessive use of coupons and menu expansion, and tough competition. The company earlier had said sales at its Boston Market restaurants are falling and that it would write off hundreds of millions of dollars in loans to franchisees. The company raised more than $900 million in stock and bond sales starting in 1993 that it lent to area developers to build franchised restaurants. In the fiscal first quarter, Boston Chicken reported a loss of $312.6 million, or $4.38 a diluted share, more than six times the expected per-share loss from analysts polled by IBES IBES See: Institutional Brokers Estimate System International Inc. Falling sales forced the company to take a $202 million charge to reflect potential losses on loans to franchises, on top of a $128 million write-down in its fourth quarter. Boston Chicken also took a $58.1 million charge for losses at a partnership that owns stakes in most of the franchise organizations. Boston Chicken's founders and co-chairmen, Saad Nadhir and Scott Beck, resigned earlier this month and were replaced by J. Michael Jenkins, a veteran in turning around restaurant chains The following is a list of restaurant chains. See also: Fast-food restaurant, Casual dining, List of reference tables. International
Jenkins has said the company would sell assets and take other steps to stay out of bankruptcy. Earlier this week, Boston Chicken hired Morgan Stanley  To comply with Wikipedia's , the introduction of this article needs a complete rewrite. Dean Witter Dean Witter may refer to:
Boston Chicken's shares more than doubled from a split-adjusted $10 the day it went public in November 1993. Investors expected baby boomers See generation X. and others to snap up its roasted chicken and side dishes, most of which was meant to be eaten at home. The company, however, was hurt as grocery stores started to sell pre-made meals and it moved into the cutthroat fast-food arena with lunch-time sandwiches. In the meantime Adv. 1. in the meantime - during the intervening time; "meanwhile I will not think about the problem"; "meantime he was attentive to his other interests"; "in the meantime the police were notified" meantime, meanwhile , the area developers racked up more than $500 million in losses as they added restaurants. CAPTION(S): 2 Photos, Chart PHOTO (1--Color) Boston Chicken may have to write off hundreds of millions in loans to owners of franchises such as this Boston Market in Woodland Hills. Evan Yee/Daily News (2) Nicholas Raskasky, 3, looks for the perfect bagel at Noah's New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Bagel in Federal Way, Wash. Parent company Boston Chicken has hired Morgan Stanley to help sell some or all of its 52 percent stake in Einstein/Noah Bagel Corp. Barry Sweet/Associated Press CHART: PLUCKED Shares of Boston Chicken hit an all-time low Friday: Dec. 3, 1996: $41 1/2 May 29, 1998: $2 1/32 SOURCE: Daily News research, Bloomberg News Bradford Mar/Daily News |
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