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The operator of Hawaii’s four Sizzler restaurants that filed for Chapter 11 bankruptcy last week indicated this week that it might cancel or sell some of its store leases.
The possibility was disclosed in a filing this week in U.S. Bankruptcy Court that also shed new light on what led to the move by GoKo Restaurant Enterprises LLC to restructure its debts while operations continue.
A declaration filed by GoKo principal Clinton Goo disclosed that the company has been unable to meet financial obligations of landlords, its franchisor and a creditor, Sovereign Bank, whose debt is secured by GoKo assets.
Goo stated that a downturn in consumer spending in the past recession hurt the company with more than $6 million in annual sales.
Jerrold Guben, a local attorney representing GoKo, on Monday said the bankruptcy filing was made to protect the restaurants from any operational interruption, and that GoKo had an unspecified dispute with franchisor Sizzler USA.
Goo cited "technical issues" including an inspection by Sizzler USA that he believed was a pretense to canceling or reforming GoKo’s exclusive license to operate Sizzler restaurants statewide.
GoKo’s four restaurants are all on Oahu — in Kailua at Aikahi Park Shopping Center, in Aiea at Pearlridge Center, in Kapalama at Dillingham Plaza and in Waipahu at 94-030 Farrington Highway.
Goo stated that GoKo should return to profitability with an expected strengthening of the economy, reduced debt payments to Sovereign Bank and re-evaluation of store leases, including the "possible rejection of leases or sale of locations."
