Many Florida residents may be familiar with the deep-dish pizza chain Giordano’s. And while the company filed for Chapter 11 bankruptcy about 10 months ago, it was recently announced that an investor group has acquired the company.
According to the February bankruptcy filing, the family owned business Giordano’s owed millions of dollars to creditors. One of those lenders was Fifth Third Bank, which was owed $45.5 million. However, with the bankruptcy trustee assigned to the case claiming that Giordano’s assets will bring about $65 million, the thought is that there will be enough left over for the other unsecured creditors mentioned in the filing to be paid back.
When looking at what happened to Giordano’s, the owner said that the filing was necessary due to the downed real estate market. Specifically, the real estate holding company that the family used could not lease or sell properties in Florida or Illinois because of how hard those areas were hit by decreased real estate values.
In general, filing for bankruptcy is one way to take care of outstanding debts. For Giordano’s, the company was in business since 1974 when two brothers opened the first of many. The company was later sold in 1988, and has since grown to 47 restaurants in Florida and Illinois.
Overall this case highlights that often successful businesses find themselves in debt for reasons beyond their control, like a decrease in real estate values. In those cases, instead of just continuing to struggle, it’s best to look into what bankruptcy options may be available in order to pay off what is owed.
Source: Nation’s Restaurant News, “Report: Giordano’s sells for $61.6M,” Mark Brandau, Nov. 16, 2011