The Daily Northwestern, Sun Times Media and other news sources in Illinois, has reported that a popular Chicago-based pizzeria chain will remain open, and will continue to make their famous stuffed pizza, though they recently filed for Chapter 11 bankruptcy.
Giordano’s plans to keep all of its franchises open and operating as the court has granted them $36 million in bankruptcy loans.
Vladimir Georgiev, manager of the Evanston location said, “Our store will continue working, everything will run as normal.”
Giordano’s, as do many other businesses in bankruptcy, blames the 2007 real estate market crash for their current demise. But as the Giordano’s chain is owned by the Apostolou family – that also owns the Randolph Partners LLC real estate company – the market’s crash directly effected their pizza business as well.
Randolph Partners LLC handles properties in both Illinois and Florida. Unable to sell, or lease, many of their properties since 2007, the company defaulted on their bank loans with Fifth Third Bank – leaving a debt of $45.7 million.
Efren and Joseph Boglio, two brothers that had emigrated from Italy to Illinois, founded Giordano’s in 1974. They specialized in Italian cuisine.
They sold the chain to John and Eva Apostolou in 1988 and stuffed pizza then became the much-requested item on the menu.
In 2006 the Apostolou’s added six more restaurants in Florida to their existing Illinois-based chain. The company currently owns a total of 55 stores within the two states.
Randolph Partners is listed as owners of 12 of the buildings that house Giordano’s and they lease all of the other locations from third-party landlords.
Giordano’s gets its food products from their company-owned American Foods in Mount Prospect
The Apostolou family filed a total of 33 voluntary petitions for bankruptcy on February 16 in U.S. Bankruptcy Court in Chicago. Bankruptcy Court Judge Eugene Wedoff has allowed the company to maintain its bank accounts and operations to so that the restaurants can remain open.
Seth Bernstein, a sophomore at Medill, said, “Giordano's is the best one around here, I can't believe they're going bankrupt. It almost came out of left field, because I haven't seen any rumors or seen anything about it in the newspapers or TV.”
At the same time that the Borders booksellers bankruptcy has been making news headlines for closing many stores in it’s Chapter 11 filing, Giordano’s promises not to close any.
Bernstein said, “These bankruptcy protections end up for the better usually.”
The $36 million loan is coming from Fifth Third Bank. It will be partially spent to pay employees and vendors.
The loan agreement requires that the Apostolou’s restructure their companies and liquidate all real estate assets held by Randolph Partners.
Also as part of the loan agreement – the Apostolou’s have to research the possibility of selling Giordano’s to someone else.
Some of the creditors owed are Saputo Cheese USA for $426,700, Greco and Sons with $214,000 and Heinz North America for another $132,000.
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