ATLANTA -- Atlanta-based Mrs. Winner's Chicken & Biscuits has filed for bankruptcy reorganization, bogged down by tax and lease issues.
Famous Recipe Company Operations LLC, doing business as Mrs. Winner's, filed for Chapter 11 bankruptcy protection Nov. 10 in U.S. Bankruptcy Court.
"The company is restructuring," said John J. McManus, the attorney who filed the bankruptcy for Mrs. Winner's. "There are a couple of things that ended up happening."
Mrs. Winner's was "having trouble with lease terms" and tax issues, he said.
Among the list of top 20 creditors are the Georgia Department of Revenue, which is owed $1.3 million in sales tax, and the Internal Revenue Service, which is owed $2.1 million in payroll taxes, according to the bankruptcy filing.
Other top creditors include Vanguard Bank & Trust of Fort Walton Beach, Fla., owed nearly $5.4 million as guarantors, and Coastal Bank & Trust in Fort Walton Beach, owed $2.2 million as guarantor of loan, the filing said.
Mrs. Winner's has seen its income decline over the past three years, court documents show.
Income in 2007 was $64.4 million, but dropped to $55.7 million in 2008, and then $40.6 million in 2009.
In all, Mrs. Winner's lists assets of $2.4 million and liabilities of $21.9 million, the documents state.
McManus said the company does have a restructuring plan that will be filed quickly.
McManus is meeting with Jeff Miller, managing member of Mrs. Winner's, on Nov. 15 "and we hope to have a disclosure statement and a plan of reorganization filed soon. We have a concept that we want to put together."
The reorganization plan will help Mrs. Winner's "get lean and mean and grow properly," he said.
Mrs. Winner's is doing what many companies have done during this downturn, McManus said.
"Chapter 11 filings have become a tool today for businesses to restructure themselves and that is what this is all about," he said. "They will emerge from this better than when they went into it, that's for sure."
(The Atlanta Business Chronicle)