SOAKED IN OVER $.2M DEBT Wendy’s files for bankruptcy

Two months after closure of its restaurant on Saipan, the local franchisee of the international fastfood chain Wendy’s has filed for Chapter 7 bankruptcy, claiming debts of over a quarter million dollars.

Wendy’s Saipan, Inc. President Charles Jordan filed the papers yesterday at the U.S. District Court following a decision by its board of stockholders last month.

The company opened its lone restaurant on the island in 1996, but ceased its operation due to the prolonged economic difficulties confronting the CNMI which resulted in financial losses for WSI.

Among creditors seeking payment are its 24 employees who were not given their wages and salaries for the last pay period before shutting the doors of Wendy’s Saipan for good on October 30 last year.

It also owed the CNMI government about $37,000 in unpaid taxes between the months of April and October, 2000.

Other debts included $90,490.20 in rental fees for nine months which it has yet to pay for the sublease agreement with Niizeki International Saipan Co. on a prime lot along Beach Road where its restaurant was located.

Likewise, Wendy’s Saipan incurred $92,020.66 in financial obligations to Pacific World Enterprises Saipan for supplies.

The company assured that funds will be made available for distribution to the unsecured creditors, according to the court documents.

It listed assets of $214,602. 74 in personal property, most of which are machines, fixtures, equipment and supplies used in the restaurant. Liabilities reached $267,668.31, the papers stated.

Last year, it recorded income loss of $176, 777.08, based on total revenues of $789,035.06 and operating expenses of $965,812.14 which included wages and salaries.

Aside from its financial woes, Wendy’s Saipan is still facing two civil actions in the Superior Court brought by Niizeki for failure to pay its rent and by Pacific World.

On Dec. 27, Presiding Judge Edward Manibusan granted the motion for summary judgment sought by Niizeki to demand payment of the debts.

Wendy’s and other establishment on the island have been severely affected since the onslaught of the regional crisis in 1997. As a result, the restaurant was forced to take cuts in operating expenses as it shortened store hours and eliminated breakfast menus.

The popular international chain has 365 restaurants throughout the world, excluding 4,964 in the mainland United States, 300 in Canada and about 1,866 Tim Horton’s restaurants.