Last Monday, four of Alizadeh’s real estate companies filed for Chapter 11 bankruptcy reorganization with debts of more than $66 million.
The companies are the developers of several shopping centers and an office complex in the Sacramento area of northern California.
Alizadeh’s restaurant businesses were placed under bankruptcy protection in 2008 and 2009.
“He has struggled long and hard to keep the properties fully occupied,” Malcolm Segal, an attorney for Alizadeh, told the Sacramento Bee. “But the economy hasn’t gotten to the point where a business like his can survive.”
Filings with the federal Bankruptcy Court in Sacramento list Wells Fargo Bank as the largest creditor, owned more than $50 million, followed by Mechanics Bank, which is owed $15 million.
A Chapter 11 reorganization usually allows debtors to continue operating while they restructure their debts. The term Chapter 11 refers to the relevant part of the federal bankruptcy law.
But Alizadeh, 52, faces criminal charges as well as financial pressures.
The state attorney general’s office filed criminal charges against him in January, alleging that he failed to pay more than $7 million in state sales and payroll taxes.
Alizadeh pleaded not guilty, but his attorney Segal said the developer hopes to resolve the criminal case by repaying the state.
Alizadeh came to the United States as a teenager in 1977. He started his career by making tacos and later built up a chain of Jack in the Box franchises and TGI Friday’s restaurants.
He later branched out into commercial development and at one time owned dozens of office buildings and shopping centers.
Many of those projects have been abandoned, while most of his Jack in the Box restaurants have been sold.
