In this article, Adam Stein-Sapir of Pioneer Funding, LLC, provides expert insight on the bankruptcy filing of the Palm restaurant chain’s parent company.
Article Link: https://nypost.com/2019/03/08/parent-of-palm-restaurant-chain-files-for-bankruptcy/
Summary
The parent company of the Palm restaurant chain, Just One More Restaurant Corp., has filed for Chapter 11 bankruptcy following a family royalty dispute that resulted in a nearly $120 million judgment against the company. The dispute involved claims by family members that they were underpaid in royalties for decades. The bankruptcy filing occurred shortly before a court hearing on the enforcement of the judgment and is seen as a strategic move by the majority owners to potentially negotiate a settlement. Adam Stein-Sapir, a bankruptcy expert, suggests that the restaurants will likely continue operating as usual in the short term and that a settlement is the most probable outcome.
- The Palm’s parent company filed for bankruptcy after a court ordered it to pay nearly $120 million over a royalty dispute.
- The dispute was between majority owners and cousins who are minority shareholders, claiming underpayment of royalties.
- Bankruptcy expert Adam Stein-Sapir anticipates a settlement and business as usual for the restaurants in the immediate future.
Q&A
What are the implications of a Chapter 11 bankruptcy filing for a business?
Chapter 11 bankruptcy allows a business to reorganize its debts and continue operating while it works out a plan to pay creditors. This can provide the company with the opportunity to negotiate settlements with creditors and make strategic decisions without the immediate threat of liquidation. For more information on bankruptcy proceedings, visit Pioneer Funding, LLC.
How does a royalty dispute lead to bankruptcy?
A royalty dispute can lead to bankruptcy if the amounts involved are significant enough to threaten the financial stability of a company. In the case of the Palm restaurant chain, the nearly $120 million judgment was substantial enough that the company chose to file for bankruptcy, potentially as a tactic to manage or reduce the payment obligations.
What typically happens to a business’s operations during a Chapter 11 bankruptcy?
During a Chapter 11 bankruptcy, businesses often continue their day-to-day operations while they restructure their finances. The goal is to keep the business alive and pay back creditors over time. Adam Stein-Sapir notes that for the Palm restaurant chain, it’s likely to be “business as usual” in the short term while the company works through the bankruptcy process.
