Giordano's Pizza Owners Charged With Looting
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Giordano’s Pizza Owners Accused Of Looting in Bankruptcy Court

January 30, 2011


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On behalf of the bankruptcy court currently handling the case of Chicago pizza chain Giordano’s, a bankruptcy trustee has accused the chain’s owners of "looting" company funds for personal use, reports the Chicago Tribune.

The accusation comes nearly a year after the restaurant entered its bankruptcy petition. In February 2011, Giordano’s sought relief from the bankruptcy court in part because of liquidity concerns that prevented its managers from keeping the restaurant’s locations open.

Now, however, it seems that those liquidity concerns were caused in large part by personal use of company money. Sources note that the owners of Giordano’s, John and Eva Apostolou, reportedly took money from the restaurant to raise their own salaries (from a combined $1.1 million to $1.7 million), pay utility bills for a Florida residence, make rent payments on their Chicago apartment, and cover various other personal expenses.

All told, the bankruptcy court reports, the couple is responsible for fraudulently transferring more than $4.4 million from the restaurant’s funds to private accounts between January 1, 2010 and the restaurant’s bankruptcy filing in February of last year.

If the charges are substantiated in court, the Apostolous could be on the hook for the money they eliminated from Giordano’s accounts. It is even conceivable that the couple might face charges of bankruptcy fraud for seeking the bankruptcy court’s protection after improperly divesting the restaurant of its assets.

Because of the alleged "looting," some of Giordano’s creditors did not receive scheduled payments in the months leading up to the restaurant’s bankruptcy filing.

According to the Tribune, the couple denies that they took money from the company. Because they were the company’s only shareholders, they argue, taking a profit from the company’s earnings was fully within their rights and the law.

The dispute continues in bankruptcy court. Recently, most of Giordano’s assets have been auctioned off as part of the ongoing case. Included in the auctions were several of the restaurant’s locations, including its central hub, located in downtown Chicago’s "loop."

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