Nov. 5--NORFOLK -- The companies that own multiple Popeyes Louisiana Kitchen restaurants in Hampton Roads have filed for bankruptcy -- three days after their primary lenders sued them for defaulting on $5.07 million in loans.

Twelve entities under the Saratoga Food Group LLC umbrella filed Monday for Chapter 11 protection from creditors in U.S. Bankruptcy Court in Norfolk. Saratoga Food Group, based in Virginia Beach, owns and operates 15 local Popeyes franchises through its various entities. Another of those, Saratoga Food Group Nova LLC, previously had filed for Chapter 11 protection in late September for its fast-food restaurant on East Little Creek Road in Norfolk.

General Electric Capital Business Asset Funding Corp. of Connecticut and CEF Funding II LLC sued the entities representing all 15 local Popeyes on Friday in U.S. District Court in Norfolk seeking to collect the unpaid debts. The money funded construction of the restaurants and the equipment, fixtures, inventory and other property needed to operate them, according to the lawsuit.

The suit also names Joseph R. Simone, the Virginia Beach man who founded Saratoga Food Group and guaranteed the loans, as a defendant.

The lenders ask for the appointment of a receiver to take over operation of the restaurants. According to the suit, AFC Enterprises Inc., which owns the Popeyes franchise, has terminated Saratoga Food Group's licenses to operate under the Popeyes name as of Oct. 24.

"As a result, there is an imminent danger that the Popeyes restaurants operated by the Saratoga entities may stop operating or 'go dark,' which would greatly diminish the value of the restaurants and equipment and would significantly impact the likelihood of recovery with respect to the defaulted loans," the suit says.

Simone did not return phone messages left at Saratoga Food Group's corporate offices on South Oliver Drive. He signed the bankruptcy filings, identifying himself as managing member of the entities.

Chapter 11 bankruptcy allows a company protection from its creditors so it can reorganize and continue operating.

The filing for the Pop-eyes on East Virginia Beach Boulevard in Norfolk lists assets between $1 million and $10 million and liabilities of $500,001 to $1 million. In addition to a secured debt of nearly $450,000 to General Electric Capital, the restaurant owes $21,226 in city and state taxes and $6,474 in rent to Janaf Shopping Center LLC, according to the filing.

The filing also shows that the restaurant brought in $776,385 in revenue so far this year and $971,278 last year. That's down 9.5 percent from sales listed at $1.07 million in 2007.

Carolyn Shapiro, (757) 446-2270, carolyn.shapiro@pilotonline.com

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