Agreements were reached Friday with approximately 40 landlords
to defer almost $500,000 in lease payments for the month of May in
negotiati ons between attorneys representing Kelly-Johnston
Enterprises Inc. of Oklahoma City and attorneys representing
landlords of several of the firm's restaurants.
The agreements were reached during a morning conference that was
to have taken place during a hearing before U.S. Bankruptcy Judge
Robert L. Berry.
Kelly-Johnston and the firm's subsidiaries, Chi-Chi's Food
Service, Joe Kelly's Restaurants, Duff's Enterprises, and B & W
Metals all entered Chapter 11 bankruptcy proceedings April 26 in U.S.
Bankruptcy Court in Oklahoma City.
According to attorney Kent Meyers, the agreements will allow the
firm to defer approximately $500,000 in lease payments for several of
its Chi-Chi's restaurants, Kelly-Johnston leases, Joe Kelly's leases
and B & W Metals.
"We're really looking for an extension to even out the cash flow,"
said Ray Koss, executive vice president of Kelly-Johnston.
"We expect to file for an extension on some June leases, because
if we didn't, it might spread us out too thin."
Koss said Kelly-Johnston was negotiating with several landlords to
reduce rent payable in the future.
Meyers said eight landlords had filed objections to the extension
of time in which Kelly-Johnston could pay rent, but all eight came to
an agreement with the firm to delay payment.
Another development in the firm's bankruptcy case came to light
Thursday when Joe Johnston, chairman and president of Kelly-Johnston,
announced an agreement had been reached with the former owners of
Duff's Enterprises which would eliminate approximately one-fourth of
The agreement, if approved by an Ohio bankruptcy judge, could
erase almost $10 million to $12 million in debt for Duff's
Enterprises Inc. of Oklahoma City.
The agreement involves the 26 company-owned Duff's restaurants,
located throughout the United States.
Pending a ruling June 18 by Cinncinatti Bankruptcy Judge Randall
J. Newsome, the settlement between Homer and Wilma Duff, the previous
owners of Duff's Enterprises, will be executed, with the
Duffsacquiring 11 of Kelly-Johnston's 26 restaurants.
The agreement must be approved in Ohio because of an involuntary
bankruptcy petition filed there April 11 by several bank creditors of
Most of the restaurants the Duff family will be acquiring are
located in Florida, with others located in Ohio, North Carolina and
The Duffs will receive the real estate leases and equipment
financing that go with the facilties, Johnston said, and will also
assume the guaranteed debt that is part of the Kelly-Johnston