The Turkey Leg Hut restaurant has reached a new boiling point. Chief U.S. Bankruptcy Judge Eduardo V. Rodriguez ordered the conversion of the establishment's Chapter 11 bankruptcy case to Chapter 7, signaling a shift from reorganization to outright liquidation. Nakia Holmes, the owner of Turkey Leg Hut, must now navigate the sale of assets to pay off nearly $5 million in debt, as detailed by The Houston Chronicle.
According to KHOU, Rodriguez's decision was influenced by a series of missteps by Holmes, including failure to file post-petition tax returns and failure to maintain appropriate insurance. Holmes' troubles were compounded by a report from the Houston Health Department, which listed 35 health code violations at Turkey Leg Hut, with some posing an "imminent threat to public health."
Amid the health concerns, a Chapter 7 bankruptcy filing could mean the permanent closure of the once-popular restaurant. KHOU 11 legal expert Carmen Roe suggested the grim outlook. "I think this business is probably going to see the end of its days. As of this filing, it's unlikely the judge would not grant it given the allegations that are being set out in this request," Roe told KHOU 11.
The move to Chapter 7 wasn't the only option on the table, as there was a push from the Texas Comptroller and Texas Workforce Commission to dismiss the case entirely owing to delinquent tax filings. However, the story of the financial mishap became increasingly clear when Rodriguez noted in his opinion that Holmes, formerly Nakia Price, had paid herself a substantial sum over a year and that money was also transferred to her husband, Lyndell Price, and minority owner, Carl Moore. The exact figures transferred to Price and Moore were not disclosed in court records.
Stakeholders in the bankruptcy proceedings have a 21-day window to respond to the court's decision. After that, a definitive ruling will come down from the judge in charge of the case, potentially marking an end to Turkey Leg Hut's operations. With health code violations shutting down the restaurant and a trustee's motion poised to liquidate the financially embattled eatery, the tables may have turned for good on the iconic Houston culinary joint. For the complete story and ongoing coverage, readers can follow the links to The Houston Chronicle and KHOU 11.
