A Houston-based U.S. judge has converted the bankruptcy of popular Third Ward restaurant Turkey Leg Hut from Chapter 11 to Chapter 7, according to court documents.
In late September, Chief United States Bankruptcy Judge for the Southern District of Texas Eduard V. Rodriguez ordered the conversion. Under Chapter 11 bankruptcy, a company can continue to operate with a court-appointed trustee while its finances are reordered. Under Chapter 7, the assets of a business are liquidated completely.
Turkey Leg Hut was sued in January by U.S. Foods, a national food distributor, for $1 million in alleged unpaid goods and services. The lawsuit alleges that the restaurant had not paid for over $85,000 in produce that was delivered between May and September of 2023 and that it had an outstanding balance of nearly $1.3 million.
In March, Turkey Leg Hut announced via Instagram that it had filed for bankruptcy. According to the filing, the restaurant owed $1.95 million to the Texas Comptroller of Public Accounts, $422,520 to the Small Business Administration, $158,000 to the Internal Revenue Service, more than $57,000 to American Express and more than $21,000 to the City of Houston for water bills, along with other debts.
In the post announcing the bankruptcy, owner Nakia Holmes, formerly Nikia Price, said the company was taking the necessary steps to continue to serve its customers.
“Turkey Leg Hut remains committed to its purpose: serving the Houston community and beyond,” Nakia Holmes wrote on Instagram. “As we go through this process, we ask for continued support. We are determined to achieve a positive outcome.”
During that same month, Turkey Leg Hut and its former co-owner, Lyndell Price, were ordered to pay over $900,000 to Steven Rogers, another former co-owner, after Rogers had filed a lawsuit against the restaurant in Harris County.
Last month, the restaurant faced another hurdle when it was closed for several days due to violating 34 health codes, according to the Houston Health Department. The restaurant did not directly address the violations but did make a social media post stating that renovations were taking place.
“We’re working on making your Turkey Leg Hut experience even better, so stay tuned for what’s coming next,” the post said. “Trust us, it’s worth the wait!”
