Dozens of Papa John's declare bankruptcy in Minn.

10:49 AM, Sep 30, 2011   |    comments
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DENVER - The franchisee owner of approximately 30 Papa John's in Minnesota has declared bankruptcy - leaving lots of his employees in a lurch.

The franchisee owner also had more stores in Colorado. Our sister station KUSA in Denver, Colo., brought the bankruptcy filing to our attention.

According to the bankruptcy filing, franchisee H. Cliff Harris filed for Chapter 11 bankruptcy back in February.

Harris estimated on the bankruptcy-filing document that he owes money to more than 200 creditors or as many as 999 creditors. The creditors are companies from all over the country.

On his filing, he also selected that he owes somewhere in the neighborhood of $10 million to $50 million to these creditors in total.

Of the 84 restaurants owned, about 40 of them are in Colorado. The employees of one Denver Papa John's restaurant were notified on Tuesday of the bankruptcy filing. Even though the note says that the purpose of the bankruptcy is to keep the company going while the parent company reorganizes its finances and manages its debt, some employees are skeptical.

According to some employees, they were unable to cash this week's paycheck with their banks. The note posted on the door of the Papa John's does address this issue.

"Unfortunately, because of the actions of a receiver and some confusion it caused with our banks, the payroll checks that went out [Tuesday] may not have been honored. This was not the company's fault, and we are working to remedy the confusion and restore the paycheck funding by the end of this week."

The rest of the posted note goes on to say that the bankruptcy filing should have no other affect on their individual operations.

The lawyer who represents the company that currently operates the restaurants says they are very sorry and mad about the situation.

The attorney says an emergency hearing will be held Friday morning in bankruptcy court.

A judge will decide then if funding will be unfrozen so workers can be paid. 

Approximately 700 Papa John's employees are in Minnesota.

(Copyright 2011 by KARE. All Rights Reserved.)

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