Perkins franchisee Campbells Land Co. Inc declared bankruptcy July 8, listing $10 million to $50 million in liabilities to more than 200 creditors, according to court filings.
It’s the same company Perkins & Marie Callender’s took to court recently to oust the operator from its 26 locations. Perkins asked to have the restaurants shut down when CLC failed to pay royalties and “uphold the standards set forth in the license agreements.” CLC has been in default since April 2018. It wasn’t contributing to marketing or paying transfer fees, leading Perkins to terminate their license agreement in early June. The company asked the court’s assistance to close the 26 restaurants.
A federal judge granted a temporary restraining order last week in favor of Perkins, meaning CLC can’t operate the stores. It was ordered to stop using Perkins’ trademarks and any signs, flags, menus, fixtures, furniture, furnishing, equipment, advertising, materials, stationary, supplies, forms or other articles.
Perkins’ June 27 lawsuit claimed CLC owned nearly $2.2 million in fees. The Pittsburgh-based company acquired 27 Perkins stores out of bankruptcy court in 2018. Perkins has about 370 locations with 254 of them franchised.
Monday’s bankruptcy filing puts the proceedings on hold. A day after the temporary restraining order was granted, Perkins filed court documents showing that many of the units in question were still operating under company branding.
The court asked Perkins to file a draft of a preliminary injunction by Wednesday. CLC was asked to file a brief by the close of business the same day, with the federal judge extending the temporary restraining order to 28 days.
CLC, whose stores are in Ohio, Pennsylvania, and New York, said it has between $1 million and $10 million and $10 million in estimated assets.
The issues between CLC and Perkins are longstanding. Legal documents said CLC served products unapproved by Perkins, such as pork chops. And, in May, a Grove City, Pennsylvania, store closed over health code violations.
Perkins worked with CLC for more than a year with a temporary license, the suit said, before moving to terminate it due to past-due royalties.