One of Papa John’s Russian structures is facing bankruptcy

One of the Russian structures of the American pizzeria chain Papa John’s, the 4 Papas company, is facing bankruptcy. The application was filed by two individual entrepreneurs who, through the court, managed to collect debts from the network for renting premises for restaurants. But Papa John’s does not agree with the actions of its counterparties, calling them “illegal,” and turned to law enforcement agencies. If a court decision to collect debt from a catering operator has entered into legal force, a statement to the police, lawyers doubt, is unlikely to bring the expected result.

The Moscow Arbitration Court accepted for proceedings the application of individual entrepreneurs Nadezhda Vyunova and Eduard Kuchin about the bankruptcy of 4 Papas LLC, which manages the Papa John’s pizzeria chain in the Russian Federation, and found “Kommersant” in the file of arbitration cases. The company tried unsuccessfully to challenge the acceptance of the application on appeal. The next hearing in the case is scheduled for December 21.

The general director of Papa John’s in the Russian Federation, Nadezhda Ovanesova, told Kommersant that the company considers the submitted application “illegal and views it as a crime.” According to her, the network has already contacted the Internal Affairs Directorate of the Central Administrative District of the Main Directorate of the Ministry of Internal Affairs of the Russian Federation for Moscow with a statement to initiate a criminal case on this fact. She did not disclose the details of the application, promising that a legal assessment would be given later. It was not possible to contact Messrs. Kuchin and Vyunova.

Meanwhile, as Kommersant discovered in court materials, at the end of 2022, $273 thousand was recovered from 4 Papas LLC in favor of Nadezhda Vyunova and Eduard Kuchin in the form of debt for renting premises on Izmailovsky Boulevard in Moscow, although the entrepreneurs in their The lawsuit demanded $310 thousand. The Papa John’s structure tried to challenge this decision of the first instance, but it was supported by the appellate and cassation courts.

If there is a judicial act on debt collection from 4 Papas LLC that has entered into legal force, filing an application with law enforcement agencies is ineffective, managing partner of the Asterisk law office Vyacheslav Khantimirov assesses the prospects of the case.

At the same time, the bankruptcy of one legal entity controlled by Papa John’s is unlikely to have a serious impact on the entire business of the chain, unless the issue of subsidiary liability of top managers and owners arises as part of the trial, says RestCon CEO Elena Perepelitsa. In addition, according to her, in recent years Papa John’s has been losing its position in the Russian market, as it is difficult for the company to keep marketing budgets at the same level and compete with the Dodo Pizza chain, which is actively developing its franchise.

However, another legal entity of Papa John’s – RED Group LLC – showed, according to SPARK, zero revenue in 2022 and a net loss of 9.8 million rubles. RED Group owns two buildings with a total area of ​​1.4 thousand square meters. m on Vorotynskaya Street and on Musa Jalil Street in Moscow. The court documents indicate that this structure owes 2.7 million rubles. Arveres LLC. This company told Kommersant that Papa John’s, faced with restrictions during the pandemic, is now restructuring its business in Russia, but continues to fulfill its obligations. Nadezhda Ovanesova says that some of the company’s partners are undergoing restructuring, but this does not affect the current business.

Meanwhile, in March 2023, a decision was made to liquidate another Papa John’s structure – Papas Com LLC. According to SPARK, the company’s revenue in 2022 decreased nine times year-on-year, to 28 million rubles, net profit decreased 24 times, to 1.3 million rubles.

Daria Andrianova, Anatoly Kostyrev