CHARLOTTE, N.C. -- On the same morning that a judge allowed an eviction against the Penguin Drive-In to go forward, managers filed for bankruptcy, and restaurant attorneys say the eviction is no longer valid.
Thursday morning, a small claims court judge ruled that the operators of the Penguin Drive-In broke their lease. The judgement gave restaurant managers 10 days to either appeal or get out. The landlord is 1921 Commonwealth Ave, Holdings LLC, and in court, its manager Don Rawlins said the Penguin owes $17,579.46 in rent, and that he sent a notice of default on July 21. The property appears to be abandoned, he said. He filed an eviction notice August 4.
Thursday's action only gave Rawlins and his company possession of the premises. The landlord's lawyer told a judge that further action would be coming to collect the rent. Outside of the courtroom, Rawlins and his lawyer wouldn't comment on what happens next, or the future of The Penguin. Rawlins called the situation "sad" as he walked away. No representatives from The Penguin showed up.
That hearing was shortly after 10:00 a.m. But Thursday night, Penguin manager Lisa Ballentine sent a statement to reporters saying the restaurant filed for Chapter 11 bankruptcy before the eviction judgment against her. According to Ballentine, that makes the eviction null and void.
"We will reopen for business next week, after our first break in over five years," Ballentine said in a statement.
Samantha Brumbaugh, a bankruptcy lawyer in Greensboro retained by the Penguin, said the bankruptcy was an emergency filing, and listed assets of less than $50,000 with liabilities between $100,000 and $500,000. Brumbaugh did not provide a list of the creditors, and said the bankruptcy is an effort to consolidate the debt, not a liquidation. In May, a 2013 bankruptcy case against the Penguin was dismissed. In that filing, the Penguin said it owed money to Rawlins, the IRS, Duke Energy, Ballentine's sister Beth Venn and others.
The restaurant's manager, Lisa Ballentine, told NBC Charlotte on August 4 that the restaurant was closed for several days because of a death in the family of a line cook, and that she and her staff decided to take some time off. She promised the restaurant would reopen August 6, but it never did. A note posted on the door said the updated opening date would be August 7, but that came and went. The phone has been cut off and, according to the eviction notice, so has the electricity.
Lisa Ballentine's late father Jim opened the Penguin Drive-In at the corner of Commonwealth and Thomas Avenues in Plaza-Midwood in 1954. The family rented the restaurant out to new managers in 2000, who kept the Penguin name and made the place wildly successful.
In 2010, the family took over management of the Penguin in a highly controversial move. Business sagged and a plan to open other Penguin locations fell through. The restaurant was closed Thursday morning, and the note on the door was gone.