Creditors seeking $1M-plus from Hawkins
Norman Yatooma is prepared to bring moving trucks to the front door of La-Van Hawkins’ office if Hawkins doesn’t hand over a check for $100,000 by April 16. “I hope I can go to his house right after I go to his office,” Yatooma said.
Yatooma is the principal of Yatooma & Associates P.C., [sic] one of the two law firms that represented Hawkins in a legal battle with Burger King Corp. in 2000.
Yatooma is also one of more than a dozen business owners with outstanding judgments awarded by area judges against Hawkins and companies owned by Hawkins ranging from $1,000 to $393,000 and totaling more than $1 million since fall of 2001. Hawkins has made payments on some of them, but other vendors have received nothing.
“Some of these companies I’ve never heard of,” said Hawkins, who disputed some of the judgments, during a phone call with Crain’s on Thursday. “For $166, I can go down to the courthouse and file a suit against (you) for $1 million and get a judgment.”
Hawkins said he was uncertain how many judgments have been filed against him and his companies.
Creditors say they’ve had trouble connecting with Hawkins.
“He basically disappeared off the face of the earth,” said Bob Ettinger, owner of New World Aviation Inc. in Allentown, Pa., who has a judgment against Hawkins and his companies for more than $200,000. “The guy’s pretty slick. For a long time, he was good as gold. Then the checks stopped coming in.” Hawkins chartered a Gulfstream G2-B from New World for flights from Detroit to Chicago, Atlanta, New York City and Los Angeles between Feb. 21 and Dec. 13, 2003.
“We haven’t gotten anything from him” since the judgment last month, Ettinger said.
Crain’s began contacting Hawkins for comments on the judgments on March 31. Hawkins originally agreed to a phone interview for last Thursday, then changed it to an in-person interview at Crain’s offices at 3 p.m. the same day. He later canceled that appointment but agreed to a phone interview and asked that questions be faxed to him in advance. He participated in a short phone conversation at 3 p.m. and then faxed responses to the questions at 11 a.m. Friday.
Hawkins told Crain’s in the written response to questions that New World and other creditors, including Inland Press Inc., Post Newsweek of Michigan Inc. (WDIV-Channel 4), Planning Perspectives Inc., Radio One Inc. and Universal Atlantic Systems Inc., would be paid out of a $500,000 escrow fund on Aug. 8. Hawkins said the fund was established late last year as part of the sale of Hawkins’ Pizza Hut franchises to pay the claims of creditors.
“We haven’t heard anything about it, and neither have our lawyers,” said Dean Browning, CFO for New World.
The biggest judgment is for Detroit-based architect Albert Kahn & Associates Inc. for nearly $393,000. The company completed design work for a restaurant on Woodward Avenue in Detroit and wasn’t paid. The judgment against Hawkins Food Group came March 20, 2003.
Susan Arneson, manager of marketing and public relations for Albert Kahn, confirmed the suit, the award and that the company hasn’t received a payment.
“It’s still an issue,” she said. “We don’t really want to say more because it’s an awkward situation that’s still ongoing.”
Said Hawkins in the phone conversation: “I don’t owe them that.”
Hawkins said he is still in litigation with Albert Kahn and declined to comment further.
Many of those not paid by Hawkins have one simple question: Why?
After all, Burger King paid Hawkins more than $30 million to settle a lawsuit in June 2001, according to a lawsuit Burger King filed March 8 in federal court against one of its insurance companies. Yatooma negotiated the settlement for Hawkins but declined to confirm the amount.
The settlement came in a lawsuit in which Hawkins charged Burger King reneged on an agreement to help him develop 225 inner-city restaurants. Burger King claimed it agreed to only 25.
Three months after the settlement was reached, Yatooma went from fighting for Hawkins to fighting against him. In September 2001, Yatooma filed suit in U.S. District Court in Detroit to collect $300,000 in legal fees.
In November 2001, the judge found for Yatooma and ordered Hawkins to pay, which he did regularly until six months ago when “he decided he’d paid enough,” Yatooma said.
“Do you know that I’m worth $100 million?” Hawkins asked a Crain’s reporter last week. But he did not explain why some of the judgments have not been paid. In the written response, he said: “On the advice of counsel, I cannot comment on any pending litigation, except I would like to say that I intend to treat those with whom I have a dispute fairly and with the thought of amicably resolving the matter. However, I cannot be taken advantage of merely to avoid the high cost of litigation and any resulting adverse publicity.”
“I don’t understand why he just doesn’t pay his bills,” said Ronald Rich, attorney at Farmington Hills-based Ronald B. Rich & Associates L.L.C. “He could pay off all his debts with one check. I don’t get it.”
Rich has been attempting to collect since February a debt of $49,939 on behalf of Global Crossing Telecom Inc. It hasn’t been taken to court yet. In January, Rich secured a judgment against Hawkins Food Group on behalf of Post Newsweek Stations of Michigan Inc., which operates WDIV, for $82,447.
In January, Pennsylvania Business Bank in Philadelphia filed suit for more than $500,000 for nonpayment on loans from the bank.
In the suit, the bank threatened to come to Hawkins’ Detroit restaurant, Sweet Georgia Brown, and take the furnishings and equipment, which he used as collateral for the loans.
Alan Fellheimer, bank president, said Hawkins is in good standing with him but said he had to file the suit because Hawkins didn’t return some renewal paperwork. The renewal was to indicate Hawkins would continue on a payment plan rather than pay off the loan.
After the lawsuit was filed, Hawkins sent in the paperwork, paid the late fees and is currently in good standing.
“This is the silliest thing you’ll ever want to hear in your life,” Fellheimer said. “He needed to file renewal papers. He could have put them in a FedEx envelope or even in the mail. He said he forgot. So we sent another set and another set. Finally I had to act. He is a difficult man to understand. But my bottom line is that I have a value on the restaurant. The restaurant has a high value. I figure as long as I have the liens on the restaurant, I’m good. He’s a pain in the butt, but eventually I get a call back. He now knows that little exercise and that I’ll do it.”
Frank Taylor, president and managing partner of Sweet Georgia Brown, said he did not know Hawkins had used equipment in the restaurant as collateral for a loan.
“I try to keep his business separate from Sweet Georgia Brown,” he said. “Every now and then he tries to give me an update, but I tell him I don’t want to know about anything that isn’t related to (Sweet Georgia Brown).”
