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WARREN W. Rosenthal is a long-time Lexingtonian whose business career spans 41 years in the food service and franchising industries. Rosenthal joined Jerrico, Inc. in 1948 and developed the company from three small restaurants into a publicly-owned entity that encompassed over 1,500 Long John Silver's Seafood Shoppes, more than 60 Jerry's Restaurants and 5 Fasoli's fast-food Italian restaurants. He became chief executive officer of Jerrico in 1957 and president of the company in 1963. He retired as chairman of the board of Jerrico, Inc. in 1989. Rosenthal is the owner of Renfro Valley Entertainment Center and is a major shareholder in the new First Security Bank. A graduate of the University of Kentucky, Rosenthal owns Patchen Wilkes Farm, a thoroughbred nursery in Lexington, and continues to be an active and generous contributor to the Lexington community.
The management of Long John Silver's Restaurants, Inc. (LJS)) recently announced its decision to reorganize the company under Chapter 11 of the U.S. Bankruptcy Code. As a previous CEO and major shareholder of the company, what was your reaction?
There were multiple reactions. It hurts to see the company you built fall like a house of cards because of greed by the original buyers, which goes back to the leveraged buyout in 1989. Then I wondered why the management didn't take Chapter 11 three or four years ago. Because of the leveraged buyout, LJS has had a debt and interest problem that couldn't be overcome. Instead of bankruptcy, LJS management fired and cut individuals out of their livelihoods and destroyed the viability of that company as it was. And now the management is faced with the problem of trying to resurrect the company without the operational staff to do the job. The management could have used better judgement.
How world you describe general business conditions in the Fast food industry?
I can best describe it by saying I am the most fortunate person in the world to be out of it. Each restaurant chain is trying to sell everything that its competition sells; the food service concepts have lost their unique market identities. Restaurateurs are also dealing with a labor market that defies any thought of how bad the quality of labor could get. Because people are abused...