Settling the Giordano’s Bankruptcy: The Art of Leaving a Slice for Everyone
The U.S. Trustee appointed Quarles & Brady to oversee the disposal of—and restore order throughout—the 50 legal entities that comprised Chicago's suffering Giordano's Pizza chain, 33 of which had filed for bankruptcy, but years of mishandling by the former owners made franchisees, lenders, and creditors reluctant to cooperate. All parties involved were solely interested in recovering as much as they could, regardless of others' losses. Not only did we work with the company's personnel, the secured creditor, and the Creditors' Committee to gain a complete understanding of the brand's assets, but we gained the trust of nearly three dozen franchisees to keep Giordano's from completely going under.
Within six months, our team organized a 15-hour auction (with aggregate bids increased from the opening bids of about $45 million to almost $70 million) and was able to close sales of all lots within 10 days to prevent further losses through default interest and professional fees. Secured creditors were then paid in full, as were employee wages and taxes. Quarles & Brady also settled litigation with the ownership family. In a situation where no one thought they would recover what they had lost in the company, the team was able to find a solution that benefitted all parties involved.