Waffle House Owner to Buy Franchisee

NASHVILLE, Tenn. - The parent owner of Waffle House restaurants, Waffle House Inc. of Norcross, Ga., plans to buy its largest franchisee, Nashville-based SouthEast Waffles, out of bankruptcy.

In a filing Monday in U.S. Bankruptcy Court in Nashville, the company, under a new corporate entity called Newco, plans to pay about $18.6 million to the franchisee's creditors and take control of its 105 restaurants in four states.

The Tennessean reported that Newco will get about $800,000 in cash from SouthEast Waffles.

SunTrust Bank sued the owner of SouthEast Waffles, James L. Shaub II, for what the bank says was misuse of company money for his own gain. In the federal court lawsuit, SunTrust seeks $10 million in punitive damages from Shaub and a former chief financial officer.

Shaub's attorney, David Raybin, said last month that his client denied allegations of missing money. Shaub "absolutely denies he engaged in any check-kiting," Raybin said.

SouthEast Waffles filed for Chapter 11 bankruptcy protection last year.

Gary Murphey, a court-appointed chief restructuring officer for SouthEast Waffles, said he thinks its a fair agreement for both parties.

"Under this plan, I think it puts the operations of SouthEast Waffles in very capable and competent hands," Murphey said.

___

Information from: The Tennessean, http://www.tennessean.com