A Chapter 7 bankruptcy generally involves liquidation, but it doesn’t necessarily mean the end of the businesses or brands connected to the business or person who filed.
Big Lots, for example, filed for Chapter 7 bankruptcy and was liquidated, but some of its stores and the right to use its name were sold to Variety Wholesalers. That transaction gave Variety Wholesalers the right to reopen between a quarter and half of the chain’s roughly 800 stores.
In many cases, however, in a Chapter 7 filing, the brands go away. When it comes to Nick Pihakis, who owns Pihakis Restaurant Group, it’s unclear whether any of his company’s many restaurants, some of which have already closed, will survive.
The case was filed by Pihakis individually, not by Pihakis Restaurant Group or any affiliated LLCs. Huntsville attorney Kevin Heard of Heard Ary & Dauro is representing Pihakis.
Pihakis has deep financial problems
Pihakis has a long list of creditors that has gotten longer since TheStreet last reported on his situation in May.
“Newly filed Chapter 7 bankruptcy records identify about 50 creditors claiming more than $44 million, offering the clearest picture yet of the financial fallout tied to the restaurateur’s business empire,” Birmingham Business Journal reported.
The filing, made Aug. 6 in the U.S. Bankruptcy Court for the Northern District of Alabama, lists approximately $10.6 million in assets against $44.03 million in liabilities. Pihakis estimated funds would be available for distribution to unsecured creditors through the liquidation process.
The document listed 14 individual loans totaling more than $23.5 million, including loans of $9 million and $3.9 million.
“Several of the debts are already the subject of more than a dozen lawsuits in Alabama and South Carolina seeking more than $23.4 million in unpaid bills. The filing also shows that Pihakis faces lawsuits of unlisted amounts in other states as well: two in Monroe County, N.Y., two in Fulton County, Ga., one in Fayette County, Ga., and a lawsuit in Atlanta Municipal Court over business license renewals which has been concluded, according to documents,” AL.com reported.
Pihakis Restaurant Group has closed restaurants
Birmingham-based Pihakis Restaurant Group (PRG), which includes restaurants in Atlanta, faces $13.7 million in lawsuits and liens, TheStreet reported in May. It remains unclear which liabilities are guaranteed by Pihakis himself, and which are solely tied to the company.
The chain, which operates a variety of concepts, including Little Donkey Mexican Restaurant, Rodney Scott’s BBQ, Hero, Magnolia Point, and Psito, has already closed a number of locations.
“Since mid-April, the group has both temporarily and permanently closed 12 restaurants across the Southeast, including Psito in Summerhill and Hero Diner in Fayetteville. Google and the group’s restaurant websites currently list the Atlanta locations of Psito and Hero Diner as ‘temporarily closed,’” reported Rough Draft Atlanta.
A number of the chain’s Hero doughnut shops, sometimes called Hero Diner, have closed before the current troubles.
“At its peak, there were at least ten Hero locations across four states. The company closed short-lived locations in Charleston and Nashville in 2024 and after opening in Montgomery in May 2025, closed it, too, earlier this month,” Tomorrow’s News Today Atlanta reported.
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In addition, all restaurants at the company’s multi-eatery Valley Post project have closed, after a lawsuit was filed against a variety of Pihakis Restaurant Group brands and founder Nick Pihakis.
“As of April 23, 2026, there is currently unpaid, past-due, and owing to Plaintiff
from the LLC Defendants a total of $394,238.73, plus interest and costs of collection, including attorneys’ fees, pursuant to the terms of the contracts and the invoices,” the lawsuit states.
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Pihakis Restaurant Group
Pihakis Restaurant Group told WBRC that it’s working with a consultant to create “more sustainable operations across our brands.”
“Following our announcement of the permanent closure of Tasty Town Greek Restaurant and Lounge in Birmingham and Hero in Hoover, we want to provide an update as we continue to work through organizing our brands and locations to ensure sustainability,” a company statement shared with WBRC on April 17 explaining the process said.
“We have engaged consulting support and are focused on doing the hard, careful work required to build a path forward — one that honors our employees, our guests, and the excellent family of restaurants that make up Pihakis Restaurant Group.”
It’s unclear whether that process is continuing, as the restaurant group has not made a public statement on its owner’s Chapter 7 bankruptcy filing.
Pihakis himself backed many of the company’s loans.
“Court records show the vast majority of the debt stems from personal guarantees tied to restaurant entities, real estate ventures and investment companies. Many of those businesses have already been sued by lenders, landlords or vendors in recent months,” Birmingham Business Journal reported.
The single largest exposure belongs to SouthPoint Bank, which is listed with approximately $23.56 million in total claims, including a $600,000 secured claim against Pihakis’ residence and more than $22.9 million in unsecured claims.
The court documents show numerous SouthPoint loans tied to projects including Rodney Scott’s BBQ locations, PRG Luca, Pihakis Investment Group, Pihakis Restaurant Group Management, and an unnamed Trussville development.
The Chapter 7 bankruptcy filing identifies at least 50 to 99 creditors and describes the debts as primarily business obligations, rather than consumer debt.
Chapter 7 Bankruptcy FAQ
What is Chapter 7 bankruptcy? Chapter 7 bankruptcy, also called “liquidation” bankruptcy, allows individuals with limited income to have certain debts discharged. A trustee is appointed to review the debtor’s assets and determine whether any nonexempt property can be sold to pay creditors.
What happens when you file Chapter 7 bankruptcy? Filing generally triggers an automatic stay that stops most collection actions. A bankruptcy trustee is appointed to administer the case, including reviewing assets and debts.
Does Chapter 7 eliminate all debts? No. Some debts generally cannot be discharged, including certain tax debts, child support and alimony obligations, and some student loans.
Can you keep your property after filing Chapter 7? Often, yes. Federal and state bankruptcy laws provide exemptions that allow debtors to protect certain property. What can be kept depends on the applicable exemptions and the individual’s circumstances.
How long does Chapter 7 bankruptcy take? A Chapter 7 case can be completed relatively quickly, although the timing varies based on the circumstances of the case. The U.S. Courts says a discharge is typically entered 60 to 90 days after the first date set for the meeting of creditors, assuming there are no issues that delay the case.
Source: United States Courts
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