Allegations Against Ex-Owners of Chicago Pizza Chain In Chapter 11

A bankruptcy trustee has alleged that ex-owners of Giordano's, the Chicago-based deep-dish pizza chain, looted millions of dollars from the business forcing it into Chapter 11 bankruptcy this past February.

The bankruptcy trustee claims the former owners, a couple, gave themselves "large and unjustified" increases in salary and used business funds to cover their personal expenses. In a lawsuit, the trustee alleges the ex-owners "were able to funnel millions of dollars in company assets to themselves, while causing injury to the debtors' creditors."

The trustee alleges that leading up to the February bankruptcy filing, the ex-owners increased their combined salaries from $1.1 million to $1.7 million, and used over $395,000 to pay personal bills, loans and other financial obligations. The bankruptcy trustee claims this contributed to the "liquidity crisis" Giordano's experienced.

Former Owners Deny Allegations Against Them

The ex-owners deny the charges against them and said in a statement through their lawyer that "Giordano's has been, and continues to be, a profitable enterprise." They argue that they were entitled to profits from the business and that all the payments they received were proper.

The former owners claim that Giordano's was forced into Chapter 11 reorganization due to an alleged conspiracy plot by the restaurant's advisors, franchisees, bankers and former attorneys. This dispute led to the filing of an over $100 million lawsuit which is now pending in Cook County.

A majority of Giordano's assets have recently been auctioned, including the flagship restaurant in downtown Chicago at the intersection of Superior and Rush streets.

Source: Chicago Tribune, Ex-Giordano's owners deny looting pizza chain, Becky Yerak, 19 January 2012

No Comments

Leave a comment
Comment Information

Need Help With A Specific Issue?