Sparkys Inc., a Spokane company that operated a chain of Sparkys Firehouse Subs restaurants here, has converted a Chapter 11 reorganization it filed in U.S. Bankruptcy Court earlier this year to a Chapter 7 liquidation.


A separately owned Sparkys restaurant located in the Tapio Center office complex, at 104 S. Freya, remains in business, says Greg Lockwood, an associate with the Hackney & Carroll law firm here who is representing Sparkys Inc. in its bankruptcy proceedings. Also, the old Sparkys at 926 W. Indiana, on Spokanes North Side, still is operating under the Sparkys name under new ownership, Lockwood says.


Gary Dyer, attorney for the U.S. Trustee, says Sparkys Inc. had filed a Chapter 11 reorganization in January, but decided to convert that filing to a Chapter 7 filing after it became clear the company couldnt make enough money to cover its operating costs.


Documents filed with the bankruptcy court say the company has total assets of $8,900 and total liabilities of about $160,000.


Lockwood says that Sparkys Inc., which opened its first restaurant here in1994, sought bankruptcy protection after a decline in business.


In essence, Sparkys wasnt having the customer flow they had when they originally opened, he says.


Other operators, however, have opened eateries in the other two former Sparkys outlets.


Staggering Ox Inc., a Missoula, Mont.-based sandwich shop operator, opened its first Spokane-area restaurant in the former Sparkys location at 14619 E. Sprague, in Spokane Valley.


Meanwhile, Scott Haggberg and his wife, Christine, have taken Sparkys former space in the Crescent Court building, at 707 W. Main, in downtown Spokane, and are operating the eatery Our Daily Bread Deli there.


The couple acquired the rights to the Sparkys name, but opted to go with a new name after operating as Sparkys for a short period.


A former Sparkys restaurant at 10606 N. Newport Highway has closed.