Friday, February 18, 2011

Chicago Giordano's Pizza Restaurants To Continue Operating Under Bankruptcy Chapter 11

Federal judge allows Giordano's Pizza franchises to continue operating while company reorganizes under Chapter 11.

By H. Nelson Goodson
February 18, 2011

Chicago - On Thursday, the Chicago Business dot com reported that a federal judge in the Northern Illinois District Bankruptcy Court ruled that Giordano's Enterprises Inc. can continue operating its 6 Chicago, 2 Naperville and 35 franchises known for making the "World's Famous Stuff Pizza" while the Chapter 11 process gets resolved. The bankruptcy filing was submitted to the court on Wednesday.
The court filing shows, Giordano's defaulted on a real estate loan, which was due on the first day of the year. Giordano's owes about $45 million in multiple real estate loans to Fifth Third Bank. The company defaulted in one loan, which was mostly for principle and interests incurred for the real estate, according to the Chapter 11 filing by Attorney Michael Gesas, who represents Giordano's.
On Thursday, the Giordano's Enterprises Inc. owners Eva and John Apostolou requested under the Chapter 11 filing that they be allowed to pay employees, vendors and to continue to operated while Giordano's reorganizes and goes through the restructuring process.
Under the Chapter 11 protection, Giordano's can use $35 million for employee payroll totaling $207,000, to pay vendors for amounts due and delivered goods within the last 20 days totalling an estimated $700,000 and to continued its operation of the pizza businesses, according to Thursday's decision by Judge Eugene Wedoff, the Chicago Business dot com reported.
The Chapter 11 filing, bankruptcy laws help people who can no longer pay their creditors get a fresh start– by liquidating assets to pay their debts or by creating a repayment plan. Bankruptcy laws also protect troubled businesses and provide for orderly distributions to business creditors through reorganization or liquidation, according to to U.S. Courts dot gov.

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