Bob McMahon has filed for Chapter 11 bankruptcy protection for several more businesses he owns in Tucson.
The move to protect his restaurants and his management company, Metro Restaurants LLC, comes on the heels of a bankruptcy filing for McMahon Properties a few weeks ago. That filing averted a scheduled auction of the eight-building complex he owns at North Swan and East Fort Lowell roads.
The new filings with the federal bankruptcy court seek to protect the assets of McMahon’s Prime Steakhouse, Old Pueblo Grille and Metropolitan Grill.
McMahon, CEO of Metro Restaurants, said his companies were able to stay open despite the recession but at a deep cost to his financial reserves.
“This is purely a business decision based on the depletion of operating capital during the recession, ever increasing expenses and seasonal variations in cash flow,” he said in a prepared statement.
Filings with the court show each of his three restaurants had between $100,000 and $500,000 in debt, but less than $50,000 in assets.
The documents, filed last week, did not list individual creditors.
The bankruptcy filings will allow him to reorganize his debt while keeping the doors open at his various businesses, McMahon said.
“A lot of great local restaurants have been forced to shut the doors over the last few years, including two just this week as result of continued hard economic times, but there is still a lot of fight left in our restaurants,” he said. “We’ve learned a lot about operating in a difficult economy and intend to use that knowledge to successfully emerge from reorganization.”
McMahon said the restaurants are profitable and recent sale trends have been positive.