ANCHORAGE - The company that owns most of the Burger King restaurants in Alaska is going through federal Bankruptcy Court on its way to new ownership.
Larry Baker, retiring founder and owner of Restaurants Northwest Inc., said the filing for Chapter 11 protection from creditors will let him sell assets the new owners don't want in an orderly fashion.
The bankruptcy protection filing was a surprise to employees, said former controller Jim Hinkle, who was shocked to learn he was unemployed at the end of 2003. He said he plans to apply for his job back when a new owner takes over - in the next several weeks, he hopes.
Burger King headquarters have yet to designate the new owner, but Baker said the corporation could make the announcement soon.
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Bankruptcy Court protection would not have been necessary if creditors had not already started suing Restaurants Northwest for not paying its bills, said Baker's attorney, Michael Mills.
Among them, the city of Wasilla has sued for back sales taxes, totaling $17,600 by last February, the Anchorage Daily News reported.
The Bankruptcy Court filing shows that Restaurants Northwest's top 20 bills total $742,800 and that Wasilla wasn't the only creditor claiming tardy tax payments.
The company owes the Internal Revenue Service $62,900. Other creditors include the state (owed $24,900) and boroughs from Fairbanks ($61,000) to Ketchikan ($41,900), according to the filing. Supplier Alaska Fresh Cut is waiting for $27,900.
Mills said that organizing a typical bankruptcy-protection case might take a year or more, although he expects to come up with a plan in a few months.
It takes longer to reorganize a company that wants to stay open, Mills said.
The next step is for the new franchisees to tell Baker which restaurants and what equipment they want to buy.
Once Burger King has given the go-ahead, the new owners can strike a deal with Baker. Then Baker can get rid of whatever is left.
Leftover assets such as buildings and equipment may be sold, rented or returned to their owners.
All of the restaurants Baker's company owns are currently closed.
