Ground Round’s abrupt closing leaves workers jobless and unpaid for final week of work.
By: Sharlee Joy DiMenichi
Employees left jobless when the South Brunswick Ground Round abruptly closed last week said they are still scrambling to find other work and pressing the company to make good on their last paychecks.
American Hospitality Concepts, the restaurant’s Massachusetts-based parent company, filed for bankruptcy Feb. 20, according to court papers.
Meanwhile, the Massachusetts Attorney General’s office has launched an investigation of numerous employee complaints that AHC owes wages and vacation pay, said Beth Stone, spokeswoman for Massachusetts Attorney General Tom Reilly.
Michael Wentworth, who was the general manager of the restaurant in the South Brunswick Square Mall on Route 1, said employees remain unpaid for their last week of work and those who tried to cash checks for the previous pay period found them worthless, Mr. Wentworth said.
Workers have been unable to contact American Hospitality Concepts, Ground Round’s parent company to ask for payment, Mr. Wentworth said.
"A lot of staff’s trying to reach them because their paychecks are bouncing," Mr. Wentworth said.
Representatives of American Hospitality Concepts did not return repeated calls.
According to the Chapter 11 bankruptcy petition, the company owes up to $50 million and has assets of no more than $50,000. A company that files for Chapter 11 bankruptcy must appoint a restructuring officer to take charge of the corporation’s finances and develop a plan to pay its debts.
More than 100 corporate-owned Ground Rounds closed nationwide Feb. 13, according to Hoovers.com, a business news site. About 70 privately owned Ground Round franchises remained open, according to an article on the site.
Mr. Wentworth said he was astonished at the closing, which he first heard of a 4:30 p.m. conference call in which an AHC official read a brief statement and hung up. The shutdown forced Mr. Wentworth to lay off 45 employees, many of whom supported themselves on income from the restaurant.
"To turn around and have to tell my staff that they no longer had a job, it was heartbreaking," Mr. Wentworth said.
Seated customers were allowed to finish their meals, but those waiting for a table were asked to leave, said Shawna Koci, a former server. In addition to the pain of having to break the news to his workers, Mr. Wentworth said the closing hit him hard personally.
"My reaction? Devastated," Mr. Wentworth said.
Mr. Wentworth said that he had gone to work Friday morning expecting that he would soon receive a $15,000 payment that officials of AHC had promised to give him when a prospective buyer closed on a deal to buy the restaurant as a franchise. Mr. Wentworth said he had believed the deal was nearly finalized and looked forward to the new owner bringing innovations that would increase business.
Instead Mr. Wentworth found himself facing a frightening prospect.
"I wouldn’t be a bit surprised if I’d lose my house," Mr. Wentworth said.
Employees were equally shocked and upset by the layoffs.
Ms. Koci, who had worked at the restaurant more than two years, said she did not believe news of the closing when she first heard it from a friend. She said she arrived in the parking lot of the Ground Round Friday expecting a lucrative weekend due to the newly opened Stop & Shop supermarket in the mall.
"A friend of ours who works with us was in the parking lot was on his phone and he said the restaurant was closed and I thought it was a joke," Ms. Koci said.
Ms. Koci said she called her boyfriend, sobbing, to tell him they had lost their jobs. The initial shock gave way to financial fears, Ms. Koci said.
"I’ve been out of work for two and a half weeks and I have about $800 in bills that I have to pay so I have to get a job right now," Ms. Koci said.
She said Tuesday that she had just found work at an Applebee’s restaurant in Milltown.
Mr. Wentworth said he is still working to recover from the financial blow. He said he had yet to see disability compensation he was owed following a surgical procedure he underwent in January and that he was aggressively seeking a new job.
"Since last Wednesday, I’ve done 11 interviews," Mr. Wentworth said.
Councilwoman Carol Barrett, who specializes in labor issues, said employees whose paychecks bounced should contact the National Labor Relations Board office in Newark for assistance. The Newark office of the NLRB may be reached at (973) 645-2100. Employees also may file complaints with the New Jersey Department of Labor’s Wage and Hour Division at (973) 648-2730, said Peter Saharko, public information officer of the state Department of Labor.
Workers have six months from the date the bankruptcy petition was filed to submit claims for their unpaid wages to the U.S. Bankruptcy Court, District of Massachusetts, at (617) 565-6080.