ALBUQUERQUE (KRQE) – There is a possible explanation why Flying Star has filed for chapter 11 bankruptcy protection. The popular chain announced last week that it would be closing its slower locations in Santa Fe and Bernalillo and would be reorganizing. The company’s court filing shows it owes more than $6 million to creditors.
But according to the Albuquerque Journal, the company has also accused its chief operating officer and financial officer of ripping off the company and the two were fired last year.
Owners claim the COO Clyde Harrington gave himself unauthorized bonuses used the company credit card for personal charges and failed to pay vendors, while the former CFO Donna Schmidt permitted the behavior to carry on. Harrington and Schmidt are suing the company for a contractual dispute Flying Star filed a counter claim.