2 firms fight for Hooters

An Horry County judge approved the sale of Hooters at a hearing Thursday, but a legal battle is brewing between two companies seeking to buy the international restaurant chain best known for its "Hooters Girls" waitresses.

Chanticleer Investors LLC is trying to exercise a right to block the sale of Hooters of America Inc. to Wellspring Capital Management. Hooters granted Chanticleer "the right of first refusal" in a previous loan agreement that would give it precedence over any other bidder seeking to buy the company.

A sale to either company is expected to close before Dec. 31, said Jim Creel, one of the estate's five executors, during his testimony.

Thursday's hearing was the latest chapter in efforts to settle the estate of Robert "Bob" Brooks, a Loris native who bought Hooters in 1986 and oversaw an expansion that made the chain a globally recognized brand. Brooks died in 2006 and his will divided his ownership of Hooters, awarding his son and daughter the largest stakes.

The settlement became more complicated when his second wife, Tami Springs Brooks, rejected the will as written and elected to take one-third of the estate's total value, which includes Hooters, an action allowed under S.C. law. She attended the hearing, as did several other family members, but declined to comment.

Chanticleer is a private equity firm based in Charlotte, N.C., and led by chief executive Mike Pruitt, a Coastal Carolina University alumnus. Pruitt was present at the hearing but declined to comment. Chanticleer sent in a request to exercise its right around 12 a.m. Thursday, lawyers said during the proceedings.

Wellspring is a New York-based private equity fund and has previously invested in restaurants such as Dave & Busters and Checkers Drive-In Restaurants.

Wellspring and Chanticleer representatives declined to comment beyond what was said during the proceedings. Pruitt patted Coby Brooks, Bob Brooks' son and current CEO of Hooters, on the back in a brief exchange after the hearing.

The executors and companies working on their behalf began searching for a potential buyer in fall 2009. After two rounds of bidding, executors ultimately chose Wellspring as the best company to buy Hooters.

The purchase agreement, a roughly 850-page document including how much Wellspring would pay for Hooters, has been sealed by the courts. Ken Wingate, attorney for the estate, said that the document was sealed "not only to protect the interest of the beneficiaries but also to protect the company itself."

Horry County Probate Judge Deirdre Edmonds approved the request to sell the company under that agreement, but that ruling does not decide which party will ultimately acquire Hooters. If the right of first refusal is properly exercised, the sale would move forward with Chanticleer as the buyer, said Michael Roh, an attorney for Chanticleer.

Chanticleer had loaned money to Hooters Air, a Myrtle Beach-based airline that failed after three years, in 2006, Creel said in his testimony. The right of first refusal to purchase Brooks' stake in Hooters was included in that agreement, said Creel, who was involved in Hooters Air with Brooks.

Creel testified on behalf of the Hooters board of directors, of which he is a member. Creel was also one of four executors of the estate in attendance. Others were Coby Brooks, son of Bob Brooks; Glenn Brooks, Bob Brooks' brother; and Jim Creel and Carter Wrenn, longtime friends of Bob Brooks. The fifth executor, Edward Greene, president and chief executive officer of Naturally Fresh Inc., which was founded by Bob Brooks, did not attend.

The acquisition agreement between Hooters and Wellspring accounts for the possibility of Chanticleer exercising its right of first refusal, Wingate said.

Two investment bankers also testified: Lorin DeMordaunt, an investment banker with McColl Partners in Charlotte, and Matthew Kelly, an investment banker with North Point Advisors in San Francisco.

Kelly said initially 240 parties were interested in buying Hooters. A pared-down group of 17 potential buyers submitted bids in the first round. Eight of the bidders were included in the final vetting of Hooters and three submitted bids in the second round, Kelly said. Wellspring's bid was ultimately selected, he said.

When asked by Michael Munden, the attorney representing Bob and Tami Brooks' daughter Boni Belle Brooks, whether it was a mistake to sell now in a weak economy rather than holding onto the company and selling later, Kelly said: "I don't have a crystal ball."

The conditions are definitely good and $6 billion in restaurant mergers and acquisitions have been conducted so far this year, Kelly said.

DeMordaunt said they thoroughly marketed Hooters and the estate is getting the best deal.

Chanticleer and Wellspring were not party to the hearing, which was only between executors and beneficiaries of the estate, Edmonds said, but both companies had lawyers present who spoke during the hearing.

At least seven members of Bob Brooks' family attended the hearing Thursday, and most declined to comment with some citing confidentiality agreements of the pending sale.

Glenn Brooks, who was present at the hearing, had contested the initial court ruling that began the process of finding a buyer, according to court documents. Glenn Brooks argued that Tami Brooks' share of the estate was incorrect and overvalued. He also claimed it was improper to sell the company before assessing tax liabilities.

But after Thursday's hearing, Glenn Brooks said he was OK with the sale and voted for it as an executor of the will. Disputes haven't affected family life, he said.

"It's just a process, the family is fine," Glenn Brooks said.

Although Tami and Coby Brooks declined to comment, other family members said the court proceedings has not damaged their relationships.

"We're not squabbling," said Betty Brooks, wife of Gerald Brooks, Bob's brother.

When asked what Bob Brooks would think about the legal proceedings, Betty Brooks said, "He's probably laughing."

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A father's fight | Relief at last

CONWAY -- Johnny Smith pitched a party Saturday at his home in a rural section near Conway to celebrate the homecoming of his daughter and to thank friends and relatives who helped him through his struggle to have her returned to his care.

The child's obvious enjoyment of the gathering belied the trauma she suffered following the breakup of a nine-year live-in relationship between her father and Helen Prince.

After being attacked and abused while in New York, then taken from her mother and placed in a foster home for two years, the child arrived back at the Smith home early on Nov. 5.

Last Monday, Johnny Smith and his wife, Cheryl, whom he wed just over two years ago, enrolled the child in kindergarten - where Cheryl said the child is adapting well and receiving good reports from her teacher.

When asked if she liked her new surroundings, the girlshyly nodded "yes." But before dashing off to get acquainted with cousins and other kin who gathered for the party, she said her favorite thing about kindergarten was the frozen treats she gets there.

"I really like the red and green slushies," she said with a big smile.

The Sun News is not naming the child because she is a victim of abuse, but the family gave permission to use her image.

Relatives that included grandparents from both Smith's and Prince's families gave the child hugs and kisses as Smith grilled hamburgers and hot dogs to feed the welcoming crowd.

"Just seeing her playing means all the world to me," Johnny Smith said as two dozen beef patties sizzled on his grill. "I'm just tickled to death to have her home. Now I just have to work out all the bills that have piled up. If I can just get through the holidays, I'll be one happy fellow."

Nearby, the child's 90-year-old great-grandmother, Lila Roberts, smiled as she sat in her wheelchair and watched the girl running about the yard with cousins who'd gathered for the reunion.

"I'm so glad I don't know what to do," Roberts said. "I had hoped that I'd live long enough to see it. Just look at her. She hasn't met a stranger yet."

The scene was a far cry from the day in July 2008, when two motorists found the then-3-year-old child wandering alone on busy Route 9 in Queensbury, N.Y., and called authorities. Unbeknownst to Smith, Prince had taken the child to Warren County, N.Y., after their live-in relationship ended and she started a relationship with a new boyfriend in Conway.

Clad in a shirt and diaper, the child had gotten away from the hotel room in which she was staying with Prince and

the sons of her new boyfriend. The child had been brutally attacked and sexually abused by those boys and, according to court documents, the boys told police they began abusing the child in Conway, then continued the abuse in New York.

After Smith's protracted struggle to bring his daughter back to South Carolina, a Warren County court judge last month granted him and his new wife full custody of the 5-year-old girl. The judge also ruled that Prince could have therapeutic visits with the girl while in the presence of a psychiatrist.

"It was two in the morning last Friday when we got back home," Cheryl Smith said.

"She was asleep so I put her to bed, then I went to bed myself because I had to work the next morning."

She's employed as a shift manager at a Socastee sandwich shop, she said. Johnny Smith said he's looking for a job after being laid off by a tractor firm for which he worked 10 years and another job he had landed servicing mechanical equipment with a restoration firm.

Advocates for change say Smith's case underscores problems in the Interstate Compact for the Placement of Children.

South Carolina legislators plan to consider changes to the law during the next session of the General Assembly. And S.C. DSS officials have already started rethinking how they implement the law.

After The Sun News published the story about his struggles, several Grand Strand residents donated money to help offset Smith's expenses, volunteered free legal help and a neighborhood "adopted" the family through the upcoming holiday season to provide gifts and other necessities.

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Fight a father | The future of the Court for child

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Editor's note: This is a follow-up to a six-part series of in-depth reports by columnist Issac J. Bailey in which he examined a Conway father's two-year struggle to bring his daughter home from a New York foster home.

This week, Johnny Smith, his wife and a few other family members will drive 17 hours to Warren County, N.Y., for a hearing before a judge who will decide whether his more than two-year fight to bring his daughter home to Horry County will end.

She has been in a New York foster home since July 2008 after being battered, bruised and assaulted by the teenage sons of her mother's boyfriend, according to police and medical reports.

On Wednesday, Smith will try to clear another in a series of hurdles to reclaim the daughter who lived safely in his home for the first three years of her life, a hurdle that would have not existed except for the drawn-out implementation of the federal Interstate Compact on the Placement of Children law by officials in New York and South Carolina.

For the past two years, Smith has been exhausting his modest savings and retirement accounts, paying lawyers and hounding officials with S.C. Department of Social Services for help.

For the past two years, Warren County DSS argued that it could not return her to Conway because S.C. DSS said the Smith home was unsuitable and "financially fragile" - a decision the Smiths could not challenge because South Carolina does not have an appeals process for cases that fall under the federal interstate rule, meaning no state judge could overturn the decision of the case worker.

After two denials, S.C. DSS recently agreed that the Smith home is now suitable for his daughter's return.

But even though the rationale upon which the Warren County Department of Social Services based its original decision no longer applies, the department plans to use another one: It will argue that Smith's daughter should remain in custody because "all of her medical, educational, mental health and emotional needs are being met," according to court documents.

And it is asking that Smith pay for more than $30,000 in medical expenses, Smith said.

His daughter now effectively has two families, both of whom have reason to be deeply, emotionally tied to her.

She has spent two years and three months with her New York foster family, which has had the primary duty to nurse her back to health, to see her wounds heal, to cradle her during nightmares, to take her to doctor and therapist appointments, and to school and activities a 5-year-old girl trying to overcome horrific abuse needs.

Smith's daughter has been calling her foster parents "mommy" and "daddy." Shortly into her stay in foster care, she began calling Smith "Johnny."

"The case worker said that was to show that they have a stable environment," Smith said. "Now I'm being called 'daddy Johnny.' For a 5-year-old to call you by your first name and not daddy is very heart-breaking, makes me feel like the three years she was here with me was pushed aside for someone else, like I'm being made to be forgotten."

A need for change

Attempts to change the laws and procedures that exacerbated Smith's plight are being considered. The S.C. Department of Social Services is reviewing options for changing the process for those subjected to the ICPC.

National ICPC reformers and experts are continuing a push for changes on the federal level, which may include taking more fully into account the constitutional rights of biological parents, commissioning a comprehensive look at the law's impact, and an appeals process for the law, which was designed to provide out-of-state social services agencies with vital information about households into which a child might be sent from foster care.

The S.C. General Assembly may weigh in when it gets back in session early next year.

"[Smith's] story ... highlighted a problem which continued to worsen due to the flaws in the law and failures of the system," said state Rep. Tracy Edge, who helps determine DSS and other health care funding. "With the legislature being out of session we have not had the opportunity to codify any changes or act upon them. ... I am told that [DSS] is trying to come up with new protocols on dealing with these issues in the future where the procedure of another state creates issues in how cases are normally dealt with."

Those changes are about broader issues concerning the ICPC, which has affected parents throughout the country, according to analysts.

For Smith and his daughter, this week is personal.

Her abuse began after Smith and the girl's mother, Helen Prince, ended their nine-year live-in relationship and the child moved with Prince to the South Carolina home she shared with her boyfriend. It continued when they moved to New York.

And although Smith sought help from S.C. investigators when his daughter was still living in South Carolina and he first suspected she was being harmed, authorities did not step in until the then-3-year-old was dressed in a shirt and diaper crossing busy Route 9 in Queensbury, N.Y.

Her mother served less than a year in jail for her role in the abuse. The boys, then 12 and 15, didn't serve time because their father wasn't present during an interrogation when they gave details of what happened.

Months after Prince was released, she was charged in similar crimes with another family in Brunswick County, N.C. Those charges were dropped after a key witness failed to show up in court. She, too, has been trying to regain custody of her daughter, though her paperwork has not been completed. She has declined to be interviewed.

The Smiths have filed suit against Warren County for custody and are asking for their lawyer's fees and other costs be paid for, though they primarily want their daughter home, they said.

"I don't know what to do no more," he said. "All they do is hide behind red tape."

Best interest

On Wednesday, it won't be about red tape. It won't be about Smith being pushed further into financial instability because of the length of the case. It won't be about the months it took to send a request for a home study from Warren County to Horry County and back again. It will be about what constitutes the ill-defined "best interest of the child."

Is it in her best interest to keep her in foster care longer or to let the foster parents adopt her, which would mean legally stripping Smith of his parental rights?

Or is it better to return to her father, his new wife, her siblings and extended family on farmland in rural Horry County?

If she is returned, "an Horry DSS worker will be visiting the Smith home," said Virginia Williamson, DSS spokeswoman. "Part of her work will be assistance with accessing services locally and assessing the need for other services. Mr. Smith would need to tell her about any problems so she can help. New York will retain responsibility for helping Mr. Smith. If New York makes this placement, everyone will work together so it can be successful."

Smith says he understands the dilemma, that his daughter "sees it as having two families."

He has already arranged a therapist and doctor and school, all of whom said they can provide the same level of services his daughter has been receiving in Warren County.

He appreciates how the foster family has treated his daughter and believes they are good people. He wants them to remain a part of her life, through phone calls and visits and other ways. But he wants his daughter home.

"The last time we visited her, she asked when she could come home," he said. "She said, 'Where's my brothers and sisters? Why can't I go home with you?' I can answer it, but it don't make sense to her. I just want to try the best I can because my daddy never tried for me."

Richard Wexler, executive director of the National Coalition for Child Protection Reform, says the legal case for returning custody to the Smiths is clear.

"If I kidnap your child at birth, flee to Mexico, take really good care of her, 'meet all her needs,' and then come back two years later - can I keep her? Of course not," he said. "So why is the standard different when the 'kidnapping' is done under color of the law by a government agency? If Johnny Smith were middle class, this wouldn't even be an issue. The child would have been returned very quickly."

Wexler recommends the judge give Smith custody while allowing the foster parents to remain involved in her life.

"Ideally, the Warren County court will recognize that, ideally Johnny Smith will allow the foster parents to remain a part of his daughter's life," he said. "And ideally South Carolina will pick up the tab to let the foster parents come and visit the child in South Carolina. Ideally. But, of course, you don't often get an ideal result in child welfare."

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