A Nashville-based franchisee of more than 100 Waffle House restaurants around the Southeast has filed for protection from its creditors as its leaders ferret out "accounting irregularities" discovered after the company's chief bookkeeper abruptly resigned earlier this month.
"It is in the best interests of the Debtor to file this Chapter 11 proceeding in order to provide for the payment of obligations relating to its on-going business operations while continuing to work to resolve the Debtor’s accounting irregularities," SouthEast Waffles CEO Jim Shaub stated in a bankruptcy court filing outlining recent events.
SouthEast's filing lists assets and liabilities of more than $10 million and says it does expect to be able to pay its unsecured creditors. Its largest creditors are another Waffle House franchisee, SunTrust Bank and a food supplier in Montgomery, Ala.
Nine-year-old SouthEast has more than 2,200 employees in four states. It owes its main lender, FirstBank, $10.8 million on a term loan and another $1.4 million through letters of credit. Other creditors include BlueCross BlueShield of Tennessee and accounting firm Lattimore Black Morgan & Cain.
Judge Keith Lundin today granted the company's motions to pay its employees and other regular expenses as well as have more time to organize its finances. SouthEast now has until Sept. 24 to do so.
Shaub, who could not be reached for comment late this afternoon, is active in local political and philanthropic circles. Earlier this year, he was on the host committee for a Mitt Romney fund-raiser. He also has served as chairman of Cheekwood's board of trust and is involved with behavioral health services provider Centerstone.
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