Md. shuts 4 Burger Kings for failing to pay sales tax 140 employees put out of work

June 23, 1993|By Michael Dresser | Michael Dresser,Staff Writer

Four Baltimore-area Burger King restaurants have been closed down by the state after the owner failed to pay $213,000 in Maryland sales tax receipts.

Last week's closings left an estimated 140 people out of work amid uncertainty over whether the restaurants will reopen under the protection of federal bankruptcy law. About half of the workers have not received paychecks for their last pay period, said one employee, who asked not to be identified.

Tamros Foods Inc., the Silver Spring-based owner of the restaurants, filed for Chapter 11 bankruptcy protection Friday in Rockville.

Bernard Gaiter, the franchise holder and Tamros' owner, could not be reached for comment. His lawyer, Nick Gallagher of Bethesda, said Mr. Gaiter was in Florida.

The Burger King restaurants that had their sales tax licenses revoked June 15 are at 4100 Pulaski Highway, 6807 Rolling Mill Road, 806 Eastern Blvd. and 8300 Pulaski Highway. Such an action by the state effectively shuts a business. A sign in the window of 4100 Pulaski said the restaurant was "closed due to electrical problems."

Other Baltimore-area Burger Kings with different franchise holders are not affected.

Elliot Tunis, in-house counsel at Burger King's Miami headquarters, said it was possible that the closed restaurants could reopen. He said Burger King had not finalized its position on the matter.

According to Mr. Tunis, Burger King recently took action to declare Mr. Gaiter in default of his franchise agreement after he

failed to satisfy the terms of a legal settlement. The franchise revocation was automatically stayed by the bankruptcy filing, Mr. Tunis said.

Marvin Bond, spokesman for the Maryland Office of the Comptroller, said the state typically shuts down a tax-delinquent business only after repeatedly trying to negotiate a payment plan that would let it remain in business.

"We would not go out and seize the license if there was any kind of agreement in the process," he said. As of yesterday, state tax liens on the properties had not been paid, he said.

Harlow Fulwood, who operates four Kentucky Fried Chicken franchises in Baltimore and Baltimore County, said he wasn't surprised to hear that another fast-food operator had run into economic problems.

The fast-food business in inner-city Baltimore and nearby blue-collar suburbs has been hard-hit by high unemployment, stagnant incomes and crime, he said.

"Outside the Beltway, they're not hurting that much, but inside the Beltway, they're taking a whipping," he said.

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