CHEVY CHASE Md. The majority stakeholder in FoodBrand LLC, the operator of some 80 big-brand restaurants in shopping malls, may be forced to seek bankruptcy protection because of financial mismanagement, according to securities filings.
Mills Corp., which owns 38 U.S. shopping malls in addition to its controlling stake in FoodBrand, agreed to sell its investment in the restaurant management company in the second quarter of fiscal 2006 and take a write-down of $18 million. But a spokesman confirmed that it still holds a majority interest. A 41-percent stake in Foodbrand, which operates the outlets of about 30 casual and quick-service chains, was purchased by Panda Restaurant Group for $9.5 million in 2001.
Mills would not comment on its pending bankruptcy and the possible effects on FoodBrand or mall operations. Executives at Panda could not be reached for comment by presstime.
According to securities filings, Mills, which has put itself up for sale, will restate financial results for fiscal years 2001 through 2004 and for the first three quarters of fiscal year 2005. Accounting errors or malfeasance surrounding foreign currency gains, executive bonuses and revenue generated from joint ventures, could cost the company between $347 million and $352 million, Mills said. While the company holds significant debt, $4.9 billion as of December 2006, it said it had negotiated an extension of its largest senior term loan and believes it will remain in compliance.
