Popeyes, Church's Chicken Chains Given to Canadian Bank Group
Oct. 21, 1992
NEW ORLEANS (AP) _ A federal bankruptcy judge has stripped Al Copeland of his Popeyes and Church's fried chicken restaurant chains and awarded them to a group of banks that helped finance his 1989 buyout of Church's.
In ruling in Austin, Texas on Tuesday, Judge Frank Monroe accepted a reorganization plan for the chains offered by the group led by Canadian Imperial Bank of Commerce.
The plan had the support of most unsecured creditors of Al Copeland Enterprises Inc., the holding company for the 1,900 Popeyes and Church's outlets in 35 states. The firm is the nation's No. 2 fried chicken restaurant chain behind Kentucky Fried Chicken.
Al Copeland, whose own reorganization plan was rejected by Monroe, lost his 100 percent ownership of the company. He still holds 26 Popeys and Church's franchises.
Merrill Lynch & Co. and a group of banks led by Canadian Imperial loaned Copeland $398 million to buy Church's in March 1989.
Copeland was forced into bankruptcy after the firm was unable to sell enough restaurants to pay off the debt and Merrill Lynch failed to find enough buyers for a key $110 million junk bond offering.
Merrill Lynch had a claim of about $150 million against Copeland. The bank syndicate led by Canadian Imperial had a $277 million claim.
The banks and Merrill Lynch will receive stock in the company, which is being renamed AFC Inc., or America's Favorite Chicken. Unsecured creditors will receive 85 cents on the dollar for their claims.