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Local bar and grill chain Boston Blackies is seeking Chapter 11 bankruptcy protection from creditors after an ambitious expansion plan that was fried by the recession.

Boston Blackies Management Co., which has eight locations in the Chicago area, list debts of $6.4 million against assets of about $17,000, according to a petition filed Nov. 24 in U.S. Bankruptcy Court in Chicago. The chain’s largest creditor is General Electric Capital Corp., which is owed $5.6 million, according to the petition.

The restaurants remain open despite the Chapter 11 filing.

Owned by the Giannis family, Boston Blackies charges $7.49 for a half-pound cheeseburger. But restaurants across the board are struggling right now, whether high-end or moderately priced, says Allen Joffe, principal at Chicago-based retail real estate brokerage Baum Realty Group LLC.

The restaurant chain’s Chapter 11 filing is “surprising, they’re a pretty good operator,” Mr. Joffe says. “But on the other side of the coin, nothing much is surprising me anymore.”

In Chicago, the company has locations at 120 S. Riverside Plaza in the West Loop, 164 E. Grand Ave. in Streeterville and 1962 N. Halsted St. in Lincoln Park, according to the company’s Web site.

Other creditors include the landlord for the company’s main offices on the Near West Side, which is owed nearly $96,000; the Internal Revenue Service, which is owed just over $84,000, and Rally Capital Services LLC, a consulting firm for distressed companies, which is owed $72,000, according to the petition, in which six related companies also seek Chapter 11 protection.

Boston Blackies hopes to emerge from bankruptcy protection and has found an ally in GE Capital. The finance arm of Connecticut-based General Electric Corp. has agreed to provide $500,000 in debtor-in-possession financing to keep the business afloat.

“We think it’s worth more alive than dead,” says Ronald R. Peterson, a partner with Chicago-based law firm Jenner & Block LLP who represents GE.

Boston Blackies’ signature burgers are “part of Chicago’s persona,” he says.

The company is bringing in an outsider as a chief restructuring officer, Martin Giardina, chief operating officer of San Diego consulting firm Trigild Inc., Mr. Peterson says. Boston Blackies is seeking Bankruptcy Court approval to hire Trigild, which specializes in distressed businesses.

In addition to providing management expertise, Trigild’s duties would include putting Boston Blackies up for sale, according to a copy of the consulting contract filed in court. Trigild’s fee will be 4% of gross revenue a month, the contract says.

A lawyer with Chicago-based Querrey & Harrow Ltd., which represents Boston Blackies, did not return a call for comment.

Boston Blackies’ financial woes started after the restaurants “overextended themselves in financing a series of failed expansion projects,” according to a motion seeking court approval for the DIP loan.

In 2003, the company bought a 19th century general store in Tinley Park, with plans to renovate the property, at 67th Court and South Street. But the Bremen Cash Store, once owned by the south suburb’s first mayor, was demolished in early 2008 and a lender filed a foreclosure suit in August, seeking $862,000.

More financial problems surfaced in October, when a landlord sued to evict Boston Blackies from 1237-1249 W. Fulton St., court records show. It is unclear whether the company ever opened a restaurant at the location.

The restaurants are named for Boston Blackie, a fictional jewel thief who made his debut in a 1919 novel by author Jack Boyle. Later adapted for the movies, radio and then television, the character evolved into an amateur detective, described as an "enemy to those who make him an enemy, friend to those who have no friend."

Boston Blackies also has restaurants in Arlington Heights, Deerfield, Glencoe, Naperville and Skokie, according to its Web site. The chain is not affiliated with Blackie’s, the South Loop bar and restaurant at 755 S. Clark St.

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