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One week ago I wrote here that with the economy slowing down, crime would be on an upswing. Two days ago my house suffered a break in and they took computer equipment, jewelry, quite a bit of stuff. It’s very unnerving to know that someone has been threw your house and rifled through your stuff. Even more frustrating is that it took the police more than 6 hours to show up at our house, very unfortunate. The burglars broke in at around 10am and it’s easy to track where they were as they used a credit card at 8 different locations from noon to 1. Here’s to hoping the robbery was random and not targeted as that would be quite a sinking feeling if that were the case.

Post excerpted from Bankruptcydata.com:

Privately-held Metromedia Steakhouses Company and certain of its affiliates filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Delaware. The Company will reorganize around its franchise operations and a profitable core of Company-operated restaurants. In connection with the filing, the Company announced that it has received a commitment of secured debtor-in-possession financing from an affiliate, Metromedia Company, the Company’s existing secured creditor. Upon receipt of Court approval, the Company will use the D.I.P. financing and cash from operations to fund operating expenses. Metromedia Steakhouses Company owns S&A Restaurant Corp., which is the parent company of Steak & Ale and Bennigans Grill & Tavern restaurants. S&A Restaurant Corp. filed for Chapter 7 protection in July 2008.

I would think that some restaurants once in bankruptcy should probably not bother to come out. If I were the owner of a failed bankruptcy chain saddled with debt (though much of it probably relieved or restructured in bankruptcy) I would strongly consider liquidating everything. It’s a tough market out there and with a Chili’s, Applebees and Outback Steakhouse in every mall who really another Americana chain restaurant?

The fundamentals of running a chain restaurant seem very dangerous to me. You need a ton of debt to open new stores and now is not the time to be taking on high debt loads. If I were a chain store owner I would be cutting back underperforming stores, slashing overhead and focusing intensely on the profitable stores in case this downturn takes a couple years to come out of.

U.S. Representative William Delahunt says that bankrutpcy courts should get more power to modify the terms of “predatory loans”. With housing prices falling throughout the US, many people everywhere are struggling with high mortgage payments that now exceed the value of their house. Delahunt acknowledged that volunatry measures so far have been unable to slow down the onslaught of foreclosures popping up everywhere from Detroit to Orange County.

Bankruptcy judges may soon get a lot of latitude in restructuring primary mortgages during bankruptcy proceedings. Banks are faced with a tough choice, let the home go into foreclosure and find a new owner or negotiate with the existing owner. Often banks are fine letting the house go into foreclosure because they can quickly get a new tenant that will pay market rates on the loan. Lately banks have been more willing to work out a deal with existing homeowners because demand for purchasing new homes has been so low that it’s harder to finder someone to buy foreclosed properties.

I assume we will continue to see a concerted push to allow people who are filing for bankruptcy to negotiate the terms of their loan with the bank. In most cases it’s in their best interest to work something out, we’ll see if this starts to happen on a larger scale.

One more retailer that is having a hard time is in bankruptcy proceedings. Retailers that were already on shaky ground are having an almost impossible time getting credit these days, so there will be more where this came from. Personally I think that large ticket consumer items like appliances, furniture and electronics will be savaged fiercely over the next few months as consumers cut way back on large purchases and stick to the small stuff.

In fairness Levitz was having problems long before September/October when the credit problems magnified, but I’m sure the overall economy only exacerbated their problems. From a consumer’s standpoint there will be a ton of good deals so if you are in the market for furniture, there’s never been a better time to buy.