The operator of 27 Perkins family restaurants — including ones in Cranberry, New Castle and Erie — has filed for protection from creditors after its corporate parent claimed the operator had defaulted on franchisee-related fees in excess of $2.2 million.
The restaurant operator, Rankin-based 5171 Campbells Land Co. Inc., filed for bankruptcy Monday under Chapter 11 of the U.S. Bankruptcy Code, which holds creditors at bay until the business can reorganize. The filing came the same day of a hearing in the United States District Court for the Western District of Tennessee on a four-count civil lawsuit filed June 2 by Perkins Restaurant & Bakery corporate parent Perkins & Marie Callender’s LLC of Memphis against Campbells Land Co. over delinquent franchise-related payments.
Named with Campbells Land Co. in the Tennessee lawsuit were company president William T. Kane and Kristine Kochis. Neither were available for comment Tuesday.
A four-count breach of contract lawsuit filed June 2 in Tennessee federal court by Perkins & Marie claims that Campbells Land Co. had failed to pay $2.2 million in royalties, marketing contributions and other fees. Perkins & Marie is seeking compensatory damages and injunctive relief, according to the lawsuit.
Judge Jon Phipps McCalla issued a temporary restraining order in the case June 28, which preserves the status quo until further court action.
The bankruptcy filing indicated estimated assets between $1 million and $10 million and estimated liabilities between $10 million and $50 million. Among the creditors with the biggest unsecured claims were the Pennsylvania Department of Revenue, $1.3 million; Ohio Department of Taxation, $835,786; and Reinhart Foodservice LLC of Mount Pleasant, $435,361.
Other Perkins restaurants affected by the filing are in Clarion, Titusville, Grove City, Greenville, Meadville, Olean, New York and several cities in Ohio. The Perkins corporate group includes 117 company-owned and operated restaurants and 254 franchised stores.
Campbells Land Co. bought the 27 Perkins restaurants out of bankruptcy in Pittsburgh in January 2018 for $7.8 million with the promise of $12 million in upgrades over two years, according to a story that appeared in the Erie Times-News.
“We’re going to remodel all of the stores,” Mr. Kane was quoted in the story. “We’re going to keep all of the employees and all of the locations.”
Kris B. Mamula: kmamula@post-gazette.com or 412-263-1699
Updated 2:24 p.m. by removing reference to ownership of a non-Perkins facility.
First Published: July 9, 2019, 8:32 p.m.