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To: Jorj X Mckie who wrote (15422)	12/5/2002 11:41:59 AM
From: Techplayer	Respond to of 57110

hmmm, is there a connection? Posted on Wed, Dec. 04, 2002 Burger King franchisee files for Chapter 11 bankruptcy BY ELAINE WALKER ewalker@herald.com Faced with debt from overexpansion and declining sales, Burger King's second-largest franchisee on Wednesday filed for bankruptcy. AmeriKing's move to seek Chapter 11 protection in U.S. Bankruptcy Court in Wilmington, Del., comes as the fast-food industry is stuck in a price war that threatens to destroy the financial viability of restaurant operations. ''Clearly the price pressure from McDonald's is what did it to them,'' said Carl Sibiliski, restaurant industry analyst with Morningstar. ``Burger King was teetering on the edge, and McDonald's $1 menu pushed the envelope.'' By filing for bankruptcy, AmeriKing hopes to reorganize its operations and restructure the debt that has overburdened the company's balance sheet. AmeriKing is in the process of renegotiating the terms of its bank loans. The suburban Chicago-based company was unable to repay the $115.5 million that was due to its lenders on June 30. AmeriKing's story illustrates the problem of many Burger King franchisees who took advantage of readily available capital to fund expansion during the early and mid-1990s. But when the Miami-Dade fast-food chain's sales hit the skids at the end of the decade, franchisees found themselves overextended. ''We grew rapidly during the 1990s and we just didn't have the sufficient cash flow to service the debt,'' said Joe Langteau, AmeriKing's president and chief executive, who joined the company in February to oversee the reorganization. ``We came to the conclusion that it was in the best interest of the company to take this step.'' For the first six months of this year, AmeriKing reported a $22.9 million loss on sales of $177 million, according to filings with the Securities and Exchange Commission. The company listed $291.7 million in debts in its court filing today. As part of its restructuring plan, AmeriKing this week closed 23 underperforming restaurants, leaving the company with 329 stores. The majority of the employees were offered positions at other restaurants. miami.com