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The Penguin Drive-In files for Chapter 11

The Penguin Drive-In, a Charlotte landmark eatery featured on TV and in movies, filed for Chapter 11 bankruptcy protection on Tuesday.

The filing followed recent revelations of financial upheaval surrounding the restaurant, located at 1921 Commonwealth Ave. in the Plaza Midwood neighborhood.

A lawsuit filed by 1921 Commonwealth Ave. Holdings LLC, the firm that leased the property to Penguin Drive-In last April, accused the restaurant of defaulting on its lease and a $17,763 loan made earlier this year.

The lawsuit states when the restaurant failed to pay its August rent, Commonwealth Ave. Holdings demanded payment in full of the remainder of the loan. Penguin paid the August rent but didn’t pay the note in full.

Separate Chapter 11 bankruptcy filings for Penguin Holdings Inc. and Penguin Drive-In LLC listed assets of less than $50,000. Penguin Holdings had estimated liabilities of less than $50,000, while Penguin Drive-In reported estimated liabilities of $100,000 to $500,000.

Both companies listed 1921 Commonwealth Holdings among their largest creditors, with each showing a claim of $22,123 outstanding.

The Penguin Drive-In bankruptcy case shows the IRS with a $140,000 claim against the eatery, and N.C. Department of Revenue with a $20,000 claim.

Don Rawlins, the lawyer representing Commonwealth Ave. Holdings, expressed surprise when told the restaurant had filed for bankruptcy protection.

“We can’t comment. We haven’t seen the papers,” he said.

Manager Lisa Ballentine, whose father, Jim, opened Penguin in the 1950s as an ice cream shop, is listed as the debtor in both bankruptcy cases. She couldn’t be reached for comment late Tuesday.

The Penguin, known for its burgers and fried pickles, has appeared on the Food Network’s “Diners, Drive-Ins and Dives,” and recently was featured on the hit movie “Bad Grandpa.” Researcher Maria David contributed.

Frazier: 704-358-5145; @Ericfraz on Twitter
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