UPDATE 1-Court approves Bennigan's franchise takeover

NEW YORK, Oct 22 (Reuters) - Atalaya Capital Management has agreed to acquire Bennigan's Franchising Co LP under a deal approved by U.S. Bankruptcy Court, the companies said on Wednesday.

The investment firm said the acquisition includes the company's equity, trademarks and other assets such as the Tavern and Steak & Ale brands.

Atalaya said it sees the deal, which was approved by the U.S. Bankruptcy Court for the Eastern District of Texas, closing by Oct. 31.

The franchising company is also working to reopen some or all of the 60 company-owned restaurants shuttered in connection with the company's bankruptcy, and adding them to the franchise system.

Bennigan's Franchising Co is also looking to open new franchisee-owned locations in the United States and abroad.

Four company-owned locations have already been reopened, the company said.

Holding company S&A Restaurant Corp and three dozen other entities, including various Bennigan's and Steak & Ale affiliates, submitted Chapter 7 bankruptcy petitions in July, seeking to sell assets.

Bennigan's Franchising Co, owner of the Bennigan's and Steak & Ale trademarks and franchise agreements, was not part of the Chapter 7 filing. Bennigan's Franchising Co represents all domestic and international franchisee-owned restaurants.

Bennigan's Grill & Tavern was founded in 1976 and has restaurants in 32 states. Steak & Ale was founded in 1966.

Bennigan's has roughly 300 restaurants in its chain, and only company-owned restaurants were closed. (Reporting by Sarah Coffey; Editing by Brian Moss)