A hearing in the U.S. Bankruptcy Court located in Pittsburgh between the owners of the Perkins restaurant chain and a company that claims ownership of local franchise agreements has been delayed due to an objection by a third party.
The agreement would have required 5171 Campbells Land Co. LLC, which operates 27 Perkins franchises in the area, to close several of the restaurants, including the one in Titusville. The agreement was between Campbells and Perkins & Marie Callender’s LLC, which owns and manages the overall Perkins brand.
However, Marc Group LLC raised an objection to the agreement, claiming that it was the owner of the franchise agreements, not Campbells. Judge Carlota Bohm ordered that a new agreement be presented on Friday. Should there be further objections from Marc Group, a new hearing will take place July 31.
According to court documents, Campbells obtained the licensing agreements to the 27 Perkins locations following the sale of all assets belonging to the previous, Unique Ventures Group LLC, on Jan. 29, 2018. Campbells subsequently signed new licensing agreements with Perkins & Marie.
Marc Group claimed in its objection, however, that Campbells was not properly registered with the Pennsylvania Department of State Corporations Bureau at the time of the sale, thus making it a “de facto entity.”
Further, Marc Group pointed to a proceeding they purport took place at the Allegheny Court of Common Pleas on Dec. 5, wherein ownership of Campbells was transferred to an individual named Dr. Peter D. Kaplan.
According to the filed objection, Kaplan sold his ownership of Campbells to Steve Maglin for $125,000 and relinquished a $1.6 million claim against the company. Subsequently, Maglin transferred ownership to Marc Group. Thus, even if Campbells was properly registered at the time of the franchise agreement sale, Marc Group will now be the holders due to the transfers of ownership.
The 27 restaurants these legal battles deal with span from Ohio to New York, with several being local to Northwestern Pennsylvania. Besides the Titusville location, there is one in Meadville, three in Erie and one in Warren to make up the regional restaurants.
While the Titusville eatery would have to be closed, the Meadville restaurant would remain open, as would two of the Erie location. The third Erie spot, as well as the Warren one, would close down. If the agreement in its current form was approved, 10 locations in total would be closed.
However, Campbells would be able to reopen those restaurants under dissimilar brands or franchises. Whether Campbells would be able to open a restaurant similar to a Perkins would be determined under the licensee agreements.
The case regarding the Perkins locations is under the purview of a federal bankruptcy court because Campbells recently filed for Chapter 11 federal bankruptcy protections as it manages its debts. Under Chapter 11, restrictions are placed on legal actions involving the entity seeking protections unless allowed by a bankruptcy judge.
The manager of the Titusville Perkins, Peggy Kinney, said “No comment” when asked about the proceedings.
Ray can be reached, by email, at firstname.lastname@example.org.