According to an article in the Dallas Morning News , Guillermo Perales placed four of his companies into Chapter 11 bankruptcy in an effort to avoid a $1 million judgment payout.

The article said:

“Rukavina said the bankruptcy stemmed from an assault of a female employee in 2004 in a Burger King outlet owned by a separate Perales company. In 2007, a jury found in favor of the employee, Rukavina said. In October 2008, the woman obtained a “judgment of nearly a million” against the Golden Corral restaurants, Rukavina said. As of last Friday, he said, the woman would have been entitled to garnish restaurant funds to pay the judgment. So the company sought bankruptcy protection.”

Perales said that the $1 million judgment would put him out of business because the company does not have $1 million cash available to pay the judgment. According to Perales, despite company earnings in the millions of dollars, margins are so thin that a judgment payout would not leave enough money to pay workers and buy food for the restaurants, making the bankruptcy filing necessary. The attorney representing the woman who was granted the judgment retorts, saying that they had no plans to garnish wages or to cause his company to shut down. He says that the bankruptcy is unnecessary. The attorney further claims that Perales has avoided testifying about his assets and the assets of his company in an attempt to avoid paying the judgment and that the bankruptcy is just another attempt to avoid the judgment payout.