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Papa John’s Pizza Employees Will Get Paychecks Despite Bankruptcy Filing

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DENVER (CBS4)- Employees of Papa John’s Pizza in Colorado will get their paychecks after all. A bankruptcy judge made the decision on Friday.

The franchisee who owns most of the chain’s Colorado locations filed for Chapter 11 on Tuesday. Workers found out their paychecks were no good.

On Friday, a judge unfroze the account that allows the franchise owner to pay employees while he goes through bankruptcy.

A legal glitch tied to the bankruptcy filing left no money in an account to pay 1,200 employees in Colorado and Minnesota.

An attorney for the ownership group, Robert Zarco, said the problems started in 2007 when the stores were purchased in a $12 million deal. Old debts totaling $2 million weren’t disclosed before the deal went through.

“Had we known that, my client never would have bought the stores or if he would have bought them, he probably would have paid $5 million or $6 million less,” said Zarco.

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