Old Country Buffet’s bankrupt parent’s creditors target former owners
The assets of the former owner of Old Country Buffet have been sold to Famous Dave’s parent company and the company is filing for bankruptcy.
But that does not mean the end of the controversy over the operation of the company, which was called Buffets LLC then Fresh Acquisition. Last week, a federal bankruptcy judge approved Fresh Acquisitions’ bankruptcy plan, which gives a trustee the green light to sue its former owners for nearly $ 20 million in embezzled funds.
Creditors of some $ 75 million in unsecured debt have accused the former owners of a variety of inappropriate transfers and embezzled funds totaling $ 19.75 million.
They include $ 4 million in misused Paycheck Protection Plan funds, as well as $ 5.25 million in “excessive management fees” and $ 3.85 million in unexplained transfers to affiliates and others. initiates.
Creditors also say there is $ 8.6 million in additional transfers of funds or real estate, unexplained credit card debt as well as a $ 2 million insurance policy to protect personal assets. directors and officers.
According to court documents, people who owned or controlled Fresh Acquisitions have a combined net worth of $ 62.7 million, of which $ 31.6 million is in cash.
Fresh Acquisitions filed for bankruptcy in April. The company represented the last remnants of what had been a massive national operator of buffet brands including Old Country Buffet, HomeTown Buffet, Ryan’s and Furr’s. At one point it was called Buffets Inc., Buffets LLC or Ovation Brands and operated over 650 locations. But in the past decade, the company has filed for bankruptcy four times.
Investment firm Food Management Partners acquired the company in 2015 and merged it with Furr’s, which it also bought out in bankruptcy. The company has since been accused in lawsuits of neglecting facilities or forcing employees to work outside the clock.
Fresh Acquisitions’ bankruptcy earlier was the fifth total involving the company or its brands. At the time, he had a deal to sell to a company called VitaNova for $ 3.2 million, all of which would have been used to pay off a loan that VitaNova made to Fresh to get out of bankruptcy. At the time of filing, the only restaurants in operation were the six units of the Tahoe Joe’s steak brand.
The court judge dismissed the sale after creditors raised questions about the deal and the relationship between VitaNova and Fresh Acquisitions. But they also questioned pre-bankruptcy transfers and hijacked loans.
The company was brought back to market again and later sold to BBQ Holdings for $ 4.2 million. The deal gave BBQ the Tahoe Joe’s chain as well as the intellectual property to the buffet brands, but the company is not interested in reviving the other chains, more or less dead.
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