[Pictured, left, Skipper the Parrot]
According to the Associated Press and other news sources, franchisor Skipper’s Inc., which operates 59 seafood restaurants in five Western states, has filed for Chapter 11 bankruptcy protection, mostly because of unpaid federal taxes.
Skipper’s filed for reorganization in U.S. Bankruptcy Court, listing the Internal Revenue Service as its biggest creditor with $2 million in unpaid federal employment taxes and penalties out of $6.7 million in debt.
Skipper’s Inc. plans to close five of its Skipper’s Seafood ‘n Chowder House restaurants. According to company lawyer James L. Day, bankruptcy protection would allow Skipper’s to break long-term leases on the five unprofitable stores and on six others that were closed earlier.
Of the 54 remaining outlets, 32 are in Washington state. Four other Skipper’s restaurants are operated under franchise agreements, and the company also sells a line of clam chowder, tartar sauce and other packaged products through retail outlets.
Something Fishy Going on in Accounting
Kenneth Williams, principal owner of Skipper’s, said that neither he nor other principals knew federal employment taxes went largely unpaid for more than a year. He accused former Skipper’s finance director Eric Li of arranging to “cover up the accruing tax debt” through false financial reports to senior managers. He claimed that Li “abruptly disappeared” a month after the problem became known.
Skipper’s, known mostly for fried fish, was founded in Bellevue in 1969 and at its peak grew to about 220 restaurants around the Western U.S. Meridian Capital bought Skipper’s in 1995 and the chain was down to 78 outlets in 2002 when it was sold to Seafood Restaurants Northwest LLC, the current owner. According to court filings, sales have declined from $30 million in 2004 to $23 million in the first 11 months of 2006.
Read more here:
Skipper’s Chain Files for Bankruptcy
Skipper’s Restaurant Chain Files Chapter11 Petition
Skipper’s files for bankruptcy protection
Skipper’s Inc. Company Website
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