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Penguin Drive-In files for Chapter 11 bankruptcy protection

Penguin
MARK HAMES - mhames@charlotteobserver.com
There was no activity at the Penguin Drive-In at midday, and phones went unanswered into the evening. The 60-year-old business is facing eviction, according to court documents.

The troubled Penguin Drive-In restaurant filed for bankruptcy protection in federal court Thursday, the same day its landlord’s eviction case moved forward in state court.

The Chapter 11 filing, submitted by Penguin owner Lisa Ballentine on behalf of Penguin Drive-In LLC, shows the restaurant with less than $50,000 in assets and well over $300,000 in debt.

Among the debts listed: $140,000 to the Internal Revenue Service; $70,000 to her sister, Beth Venn; $45,000 to AdvanceMe Inc., which specializes in giving cash advance loans to small businesses; $30,000 to Charlotte accountant Peter Bell; and $20,000 to the N.C. Department of Revenue.

The landmark eatery’s future has been in doubt since news surfaced more than a week ago that it had closed. Ballentine initially said it would reopen Aug. 6, but that didn’t happen.

Her bankruptcy attorney, Samantha Brumbaugh of Greensboro, told the Observer on Thursday that the restaurant will reopen “soon,” though she declined to say exactly when.

Asked whether Ballentine would be available for comment, she said, “Probably not.”

“The owner is currently taking a vacation,” she said.

The eatery, at 1921 Commonwealth Ave. in the Plaza Midwood neighborhood, is famous for its burgers and fried pickles and has been featured on the Food Network. But it has changed hands in recent years amid financial setbacks and management struggles.

The property’s landlord, 1921 Commonwealth Ave. Holdings LLC, sued the restaurant’s management last year, accusing the eatery of defaulting on its lease and a $17,763 loan.

The business first filed for bankruptcy protection in November. In May, a federal judge threw out one of the Penguin’s two bankruptcy filings, ruling the business hadn’t paid necessary fees or filed required financial documents. The second bankruptcy case associated with the restaurant was dismissed last month.

The debts listed in Thursday’s filings largely mirror those listed in the bankruptcy cases that were thrown out.

Thursday’s filings came on the same day 1921 Commonwealth Avenue Holdings received a hearing in Mecklenburg District Court on its request to have the restaurant evicted from the property.

A magistrate ruled that 1921 Commonwealth had proven its case and that the Penguin should be removed. The judge found that the Penguin owes $17,579.46 in rent.

It wasn’t immediately clear whether the bankruptcy filing blocks the eviction case from proceeding.

Don Rawlins, a lawyer listed in court papers as an official with 1921 Commonwealth, declined to comment. Staff researcher Maria David contributed.

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