Ousted Owner Cooks Up Plot to Buy Giordano’s

The ousted owner of the Giordano’s pizza chain is putting together a bankruptcy auction bid that would enable him to recapture the iconic Chicago restaurant company once again—though his attempt may turn out simply to be a pie-in-the-sky proposal.

An attorney for John Apostolou said late Friday that he and his family members are negotiating with lenders to raise more than $70 million that they’d use to bid on the restaurant, Giordano’s Enterprises Inc., which is expected to be auctioned off by the end of the year.

Apostolou’s attorney, Zane Smith, said that the group’s proposal could be the auction’s so-called stalking-horse bid, which would set the floor price for the event and is typically meant to rally bids from outsiders. That first bid, along with the entire auction process, would need approval from a bankruptcy judge.

The proposal would enable Apostolou to recapture—if just a modest slice—of his former business, which defaulted on its loans after Apostolou made a bad bet on a Florida real-estate development outside Disneyworld.

“Even though I made mistakes, I know this business inside and out; what makes a profitable restaurant, what you need to get the perfect stuffed pizza, every detail,” Apostolou said in a statement released through his attorney. “Don’t forget, I was the one that built Giordano’s into the successful business it is. I realize today that the new Giordano’s will need a new CEO, as well as new executives to direct its financial and legal affairs, and that I am not the person for those jobs. But when it comes to understanding what it takes to make a great Giordano’s restaurant, there is no one more qualified than I am. And at the end of the day, this is a restaurant business. Without well run, profitable restaurants, there is no company.”

Apostolou hired Smith, a personal- injury lawyer, to bring a lawsuit against a former Giordano’s executive, the chain’s main lender Fifth Third Bank and a handful of franchisees—three groups that he alleges ganged up on him to deprive him of control over the profitable Giordano’s chain.

That lawsuit, filed Wednesday in Cook County Circuit Court, claims that Apostolou and his wife, Eva, are owed more than $120 million in damages for the conspiracy launched against him by the groups—all while Apostolou was recovering from a heart attack he suffered days after he defaulted on his loan payment last summer.

Those accusations against franchisees, who are accused of bonding together against Apostolou, echo a lawsuit that Chapter 11 Trustee Philip Martino filed last week, which says they’ve conspiring to block the company’s sale to outside buyers.

Many franchise owners had stopped making royalty payments and have even started cooking with rogue ingredients that don’t conform to the pizza chain’s standards, jeopardizing its reputation and hindering the broader efforts to successfully reorganize the company, according to the lawsuit that Martino filed with the U.S. Bankruptcy Court in Chicago.

Since that point, the franchisees worked out a deal to begin buying approved ingredients once again.

In an email Friday, Martino said he’s received “no offer” from Apostolou.

“Since my appointment, such an offer has been imminent,” Martino said. “If he makes an offer, it will be evaluated with all others to identify what is best for the bankruptcy estates.”