Brown's Chicken Files for Bankruptcy

Company has liabilities totaling as much as $10 million

Wednesday, Dec 30, 2009  |  Updated 6:30 PM CDT
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Brown's Chicken Files for Bankruptcy

NBC Chicago

A chain of chicken restaurants that made national headlines in 1993 when seven employees at one of its suburban Chicago stores were killed has filed for Chapter 11 bankruptcy protection.

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A chain of chicken restaurants that made national headlines in 1993 when seven employees at one of its suburban Chicago stores were killed has filed for Chapter 11 bankruptcy protection.

Brown's Chicken & Pasta Inc. filed on Tuesday -- two months after a DuPage County judge ordered the company to pay more than $800,000 to a former vice president and minority shareholder who'd filed a wrongful termination lawsuit.

"They couldn't pay the judgment," said the company's attorney, Richard Golding, who said that $300,000 of that amount was due by Tuesday of this week. "It would have made the company insolvent."

In its petition for bankruptcy, the Elmhurst-based company said that while it had assets between $100,000 and $500,000, it also had 50 to 99 creditors and liabilities of as much as $10 million.

The filing is the latest in a series of setbacks for Brown's. Once boasting as many as 150 stores, Brown's has seen that number dwindle to about three dozen since seven employees at one of its restaurants in Palatine were murdered in 1993. Their bodies were found in a walk-in cooler.

"It had a marked impact on their business, the constant barrage of publicity which seemed to implicate, perhaps unintentionally, Brown's as something evil because that's where these murders took place," said Golding. "It kind of started a downward spiral."

The story was front page news around the country for days and in the Chicago area for months. It also continued to make headlines for years, with stories about the hunt for suspects, the arrest of two men years later and their convictions on murder charges, the first years ago and the second two months ago.

Meanwhile, said Golding, though the company successfully defended a number of lawsuits in the years since the slayings, the cost of doing so, and the time executives spent on the lawsuits, took a toll on the company.

"It was very difficult," he said.

Chapter 11 allows companies to continue to operate and Brown's plans to keep its restaurants -- all but three of which are owned by franchisees -- open while the company gets its finances in order. Golding said the three company-owned stores will be closed or sold within the next 30 days.

"The company will not be operating any of its own stores," he said.

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