5 Strange Things We Learned About Sudden Closures Of Old Country And HomeTown Buffets

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Earlier this month, buffet restauranteur Ovation Brands filed for bankruptcy and abruptly shut down many of its restaurants — like Old Country Buffet, HomeTown Buffet, Fire Mountain, and Ryan’s Steakhouse — without even a heads-up to its employees. Curious about what drove Ovation into this bankruptcy — the company’s third since 2008 — we took a closer look at some of the court filings, which raised more questions than they did answers.

There’s the bankruptcy’s timing in relation to a pending multimillion-dollar food poisoning judgement against Ovation. Not to mention the immediate auction of the contents of many restaurants — and the subsequent attempt to get those items back.

We’re still trying to sort through this culinary collapse, but here are just some of the odd things we’ve turned up about the Ovation bankruptcy.

1. The company’s bankruptcy attorneys found out that restaurant contents were being auctioned after Consumerist readers did.
   No, really: we posted about it on March 8, and the attorneys explained in a filing on March 9 that they had just learned that the restaurant contents were being auctioned that day. The auctioneers — that someone hired without bankruptcy court permission — sold everything in the restaurants that wasn’t leased or nailed down.
2. They’re going to try to get the auctioned stuff back.
   Ovation Brands can’t claim that they don’t know anything about bankruptcy: this is the third time they’ve filed for Chapter 11 (the kind where a business doesn’t shut down) since 2008.

   The San Antonio Express-News shared a bizarre exchange from bankruptcy court, where the company’s lawyers explained that they planned to contact the landlords and auctioneers and try to get the auctioned items back. “I’m not highly optimistic we’ll be too successful in that, but we’re at least going to try,” one of the company’s attorneys told the judge.

3. The company’s top creditors are a couple in Nebraska who sued Ovation over food poisoning
   While you might expect to find state tax collectors and food suppliers at the top of the list of a bankrupt restaurant’s creditors, here that honor goes to a couple from Nebraska who sued Ovation over food poisoning.The Salmonella saga began when a man from Nebraska became severely ill after eating allegedly Salmonella-laden food at an Old Country Buffet restaurant in Wyoming. He and his wife sued the buffet chain, and the company claims to have lost track of the case during their 2012 bankruptcy.
4. Ovation Brands didn’t send lawyers in 2014 to defend themselves in the food poisoning case.
   Once the company did hire some lawyers to show up, they claimed that the couple had sued the wrong company: the local restaurant was run by a separate Minnesota company called OCB Restaurant Company, LLC, making Ovation Brands not responsible for the man’s illness.

   Ovation Brands argues that the couple should have sued OCB Restaurant Company instead. The judge gave both sides 60 days to gather evidence beginning on January 7, and it was less than 30 days in that the buffet company began closing restaurants.

5. The company isn’t pretending that the food poisoning lawsuit has nothing to do with their bankruptcy.
   Ovation specifically cited the pending judgement as a reason for the bankruptcy. However, Ovation’s parent company — Food Management Partners — claims it was was not told about the lawsuit or the judgement when it acquired Ovation in 2015.

   “Such lawsuit was not disclosed by the sellers,” the press release announcing the bankruptcy said, “and Buffets, LLC, is attempting to overturn such judgment on the basis of the wrong defendant entity having been sued and other grounds.”

   The plaintiff’s attorneys requested that the company pay the judgement right away, since it appeared they were preparing to file for bankruptcy again. The judge agreed, ordering Ovation Brands to put up a bond for the full $11 million. That bond was due on Friday, March 4. The company shut down restaurants with no notice two days later, on Sunday, March 6, then filed for bankruptcy that Monday.

by Laura Northrup via Consumerist