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A court-approved $5.5 million deal to sell the Tony Packo’s Inc. restaurant chain to fast-food businessman Bob Bennett is dead.
Mr. Bennett, owner of Bennett Management Corp. and a new entity, TP Foods LLC, which was create to own and run the Packo’s chain, said Tuesday that an attempt to close the deal on Thursday failed and he is no longer interested in buying the Toledo firm.
Mr. Bennett said his decision to walk away from the ownership of Packo’s, which has been the subject of a 17-month court fight between Packo family members, came as a result of last-minute changes insisted upon by Fifth Third Bank, which holds a $2.6 million loan made to the chain.
Karen Fraker, a spokesman for Fifth Third Bank, said the institution does not comment on confidential negotiations and would have no statement regarding the Packo's deal.
Mr. Bennett, who owns 26 Burger King restaurants, said the changes, which included a doubling of the loan interest rate, substantially altered the deal and made it impossible for him to proceed.
“It got to be too risky for me to handle the deal,” Mr. Bennett said. “They wanted to run [Tony Packo’s] and they wanted me to report to them every month,” he said.
“There were a lot of conditions I felt that were overreaching, and I just couldn’t go along with it,” Mr. Bennett said. He added that he believes he spent close to $600,000 on fees and other issues negotiating the purchase of Packo’s, which is in receivership.
On Dec. 19, Lucas County Common Pleas Judge Gene Zmuda approved the sale of Packo’s to TP Foods, which was the high bidder in a court-ordered auction designed to find a buyer who could take over the firm and stablize its financial position.
The five-restaurant chain had been under the control of receiver Steve Skutch since August, 2010, after company co-owner Robin Horvath filed a lawsuit alleging misappropriation of corporate funds by his cousin Tony Packo III. Mr. Packo III, who is charged with aggravated theft of $170,000 from Packo’s in a separate criminal case, and his father, Tony Packo, Jr., were to run the company for Mr. Bennett.
As part of the purchase agreement, TP Foods was to own the Tony Packo’s name, all real estate owned by Tony Packo’s Inc. and its subsidiaries, the restaurant’s recipes, and even the famous signed hot dog buns that line the walls of its restaurants.