Posted on: Thursday, July 26, 2001
Burger King franchisee files for Chapter 11
By Andrew Gomes
Advertiser Staff Writer
The franchisee of about 20 Hawai'i Burger King restaurants, and its California parent company, have filed for Chapter 11 bankruptcy protection, but the company said its local fast-food eateries should not be affected.
Cimm's Inc. of Glendale, Calif., filed the voluntary petition for bankruptcy reorganization in California Bankruptcy Court late last week. Included in the filing was a related petition for its local subsidiary, Hawaii Cimm's Inc., which estimated assets at $1 million to $10 million, and debts at $10 million to $50 million.
Cimm's Inc. assets were listed at $12 million, and debts at $30 million. Another affiliated company involving three local Burger King restaurants, Oahu Restaurants, listed assets and debts of $300,000 and $1 million, respectively.
Larry Cimmarusti, co-owner of Cimm's, said the filing stemmed from lower sales at its Burger King restaurants systemwide and too much debt, which the company hopes to restructure.
"We have a business plan in place to restructure the loan and the only way it could be done is through Chapter 11," he said. "There is nothing wrong with Burger King business. It's business as usual."
Among the largest unsecured creditors of Hawaii Cimm's are at least a half-dozen landlords with combined claims of more than $500,000. Other major creditors include the local division of food distributor Fleming Cos., which has a $217,000 claim; Coca-Cola Bottling Co. in Hawai'i, with a $60,465 claim; and the city treasury, which has a $44,517 claim. Cimm's is disputing all claims.
In recent months, Cimm's has closed at least four local Burger King restaurants.
Cimmarusti said the plan is to replace old locations that have lower sales, primarily in-line stores at shopping centers, with more accessible stand-alone restaurants with drive-through windows. The company said it plans to open a few stores in Hawai'i, including a Burger King in Waikiki in front of St. Augustine Church on Monday.
Cimm's acquired its first Burger King franchise in 1976. The company acquired its Hawai'i Burger King franchise in 1994. Today, it operates roughly 130 Burger King restaurants in Hawai'i, California, Texas, Virginia and Washington state.
