Pioneer Chicken in Bankruptcy; Most Stores to Remain Open

Pioneer Chicken Co. has filed for protection from creditors under Chapter 11 of the federal bankruptcy code, but its franchises will stay open while the company reorganizes, its president said.

Jeffrey Kahn, who took over as the restaurant chain’s president Thursday, said the Canoga Park-based company filed for bankruptcy the same day.

Kahn said he did not know the assets and liabilities listed in the company’s filing.

The firm’s reorganization will include refinancing and possibly more closings of Pioneer’s company-owned outlets, he said. The company has closed about 10 of the 23 outlets and has cut corporate staff from 30 to about 20.

The latest news from the troubled company--which has dealt with lawsuits, landlord quarrels, insufficient advertising funds and increased competition from other fast-food chains--has franchise owners worried.

“I’ve gotten a lot of calls,” said Rod Jarboe, president of the National Assn. of Pioneer Owners. “I’m optimistic we’ll make it through this; but four or five years ago there were 300 stores and now there are less than 170.”

Kaz Nasehipour, owner of a Pioneer franchise in Sepulveda, said he hopes the company can quickly solve its financial problems. “I’ve spent about $250,000 on this place, and if something happens, I’ve lost everything,” he said.