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Brown’s Chicken and Pasta Inc. is staying in court and staying in the headlines.

The Chicago area franchise recently decided to file for bankruptcy on the heels of two lawsuits.

The decision came two months after Dupage County Judge Kenneth Popejoy ordered the company to pay $800,000 to former vice president and minority shareholder Thomas Kennefick.

There was a fall out between owners Frank Portillo Jr., who owns a 65 percent majority stake in the company, and Kennefick, who owned about 35 percent when he was vice president.

According to the Chicago Tribune, Kennefick filed a wrongful termination suit in 2007 after serving as vice president of the company for 20 years. Judge Popejoy ruled that Kennefick was owed the money for the stock he owned as a shareholder for the company.

Brown’s bankruptcy lawyer, Richard Goldberg, said the company could not afford to pay the judgment, $300,000 of which was due this week.

To avoid liquidation and a full shut-down, Brown’s Chicken filed for bankruptcy instead. As with most bankruptcy filings, they are protected by the automatic stay and any payments of legal judgments are temporarily frozen.

Kennefick said that Portillo filed for bankruptcy to get out of paying the money owed, but the company said that many issues brought them to file for bankruptcy.

At one point, there were more than 150 Brown’s Chicken and Pasta restaurants in Illinois. Now, they operate closer to 36 restaurants, partly due to a grizzly incident at a store in 1993.

Seven of employees were found murdered and placed in a walk-in cooler at one of their Chicago suburb locations. Portillo claimed this brought bad press to the company for years with the search for the suspects and then the trials.

After the incident occurred sales dropped 30 to 40 percent. Portillo said that “our customers were scared. It got to the point where we were dropping 35 percent to 40 percent in sales in the Chicago market.”

Brown’s listed in their bankruptcy petition that the company assets are valued around $100,000 to $500,000. But the issues are that the company has more than 50 creditors and around $10 million in debt. For now the company hopes to emerge from bankruptcy protection by selling off the remaining stores as successful franchise restaurants.