Chicago Real Estate Pulls ‘Za Biz Under

February 21, 2011

A famous Chicago pizza place has gone bankrupt, not because of its pizza dough but rather its real estate dough.

Giordano’s, which owns six locations in the Chicago area, four joint-venture stores and 35 franchise locations, announced last week that it has filed for bankruptcy protection after defaulting on real estate loans.

“This case is about the real estate market collapse,” attorney Michael Gesas told Crain’s. “The pizza business is very healthy and very good. This was to protect and cover payroll and vendors.”

Light at Giordano's that says ChicagoThe pizza place, whose slogan is “Chicago’s World Famous Stuffed Pizza,” applied for Chapter 11 bankruptcy protection in Chicago’s federal court Thursday.

Giordano’s, which owes lender Fifth Third Bank $45.7 million, won approval in court to use part of its $36 million bankruptcy loan to continue operating its businesses.

So, if you love Giordano’s, don’t fret; it’s remaining open. You should know, however, that the loan agreement between Fifth Third Bank and the pizzeria includes the possible sale of the company.

Giordano’s was founded in 1974 by Italian immigrants and brothers Efren and Joseph Boglio. It was purchased in 1988 by John and Eva Apostolou.

The chain didn’t expand outside Illinois until 2005.

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