The news surfaced Tuesday as two Tony Packo's Inc. officials pleaded not guilty to stealing from the company.
The owner of the private restaurant group that planned to buy the chain says his decision came after the bank holding the loan to the chain required changes. Media outlets report those changes included an increase in the loan interest rate.
Packo's executive vice president Tony Packo III and another company official pleaded not guilty Tuesday to three counts each of aggravated theft.
The diner was referenced in episodes of "M-A-S-H."
(Copyright 2012 by The Associated Press. All Rights Reserved.)