By Frederick H. Lowe
Gladys Knight’s Chicken and Waffles, an Atlanta-area restaurant chain co-founded by singer Gladys Knight and operated by her son, Shanga Ali Hankerson, has agreed to go into receivership under state supervision, William Gaston, spokesman for the Georgia Department of Revenue, said on Wednesday a day after the department closed Knight’s restaurants for failure to pay $650,000 in sales and withholding taxes.
With penalties and interest, Gladys Knight’s Chicken and Waffles’ Concepts, which is based in Jonesboro, Ga., owes the state more than $1 million, Gaston told NorthStar News Today.com.
Receivership is a form of corporate bankruptcy. Under receivership, a manager appointed by the bankruptcy court operates the business.
Since 2012, the Department of Revenue had entered into two dozen agreements with Hankerson to pay the mounting debt, but Hankerson allegedly withdrew the funds from a trust account and used the money for other purposes, Gaston said.
In April, the department launched a criminal investigation into Hankerson, and on June 17th, the department issued a warrant for his arrest. They raided the company’s three restaurants, the company’s headquarters and his home.
Hankerson turned himself in to authorities on Wednesday and was later released on bond, Gaston said. According to the arrest warrants and a press release, he is charged with theft by taking for failing to pay sales and withholding taxes.
Hankerson could not be reached for comment. His mother is not charged with any wrongdoing.
Gladys Knight’s Chicken and Waffles’ operates three very popular restaurants. Two are located in Atlanta on Peachstreet and Cascade Road. The other restaurant is in Lithonia, Ga. The Department of Revenue closed restaurants on Tuesday, but they are expected reopen Thursday now that the company is receivership.
Hankerson and his mother founded the restaurant chain in 1997, according to the company’s website.
It is not known how much of a financial stake Knight has in the restaurant chain, but when the Peachtree Street failed a health inspection on Feb. 18, Knight went to the eatery to meet with diners to assure them of the quality of the restaurant’s operation. For the use of her famous name, a normal business practice would be to pay her a fee, giving her ownership in the company.