Owner of Roanoke Hooters Sports Bar Files for Bankruptcy

RICHMOND, Va. – The owner of a number of famous restaurants in Richmond has officially filed for Chapter 11 bankruptcy protection. As they wait for an equity infusion, with which they will restructure the company, the Henrico County owner of Cornett Hospitality LLC has holdings of Hooters restaurant and Topeka’s restaurants in Richmond and three other states.

On Wednesday, the company made the filing as they listed liabilities and assets between the range of $1 million to $10 million each and creditors of around 287. With their headquarters on Staples Mill Road, Cornett Hospitality LLC owns three Topeka’s restaurants and nine Hooters in Pennsylvania, West Virginia and Virginia. Five of these restaurants are in Richmond; three Hooters branches are on Huguenot Road in Chesterfield, West Hundred Road in Chester and West Broad Street in Henrico while two Topeka’s are on Parham Road in Henrico and Hull Street Road in Chesterfield County. Filing for Chapter 11 bankruptcy will allow the company to continue operations after restructuring their finances without disturbing the operations at any restaurant location.

According to the company’s director, J. Phillip Cornett, the company had been working on recapitalizing the business about one and a half year. Even though they were well on track, they felt that the bankruptcy filing was important to protect the jobs of the 600 employees that they have while they acquire new and healthy equity.

Previously, Cornett Hospitality LLC used to own Max and Erma’s in Henrico County, Richmond as well but they were closed after filing for bankruptcy in 2010 because they were falling behind on their rent. Phillip Cornett mentioned one reason for their current bankruptcy filing to be Max and Erma’s.

The major reason for the financial troubles of the company, however, has been the recent economic downturns of the country because of which many people cut down on their dining outside their homes. Cornett believes that consumer retail restaurant business has suffered a lot in the last three to four years because of which they had to close the John Rolfe Parkway location of Max and Erma’s in 2009 and the Reynolds Crossing location in spring 2010.

As far as the creditors of the company are concerned, Bank of Virginia is the top creditor which is owed $1.8 million. Other top creditors include Virginia’s Department of Taxation which is owed $350,000 for employee withholding taxes and sales and US Food Inc. which is owed $490,000 for a loan. They also have other financial obligations mainly those towards Arizona based Spirit Financial Acquisitions worth $3 million for mortgage leasehold on a Hooters location in Chester and two in Pennsylvania. They also owe the financial company for miscellaneous fixtures and furniture.

The bad news is that Cornett Hospitality LLC is not the only one in trouble as Richmond restaurants are closing shop. However, the annual forecast conducted by the National Restaurant Association revealed in their 2012 report that sales will top $632 billion, which is an increase of 3.5 percent over the last year. In Virginia, $13.3 billion in restaurant sales are expected this year.