After months of battling in bankrupcty court, Chicken George Chicken Inc. of Baltimore has been sold after failing to come up with a reorganization plan that was acceptable to creditors.

The new owners of the chicken business said they plan to reopen five of the nine stores that were closed during the bankruptcy fight and will expand franchise operations around the nation.

The franchises, four of which are in the Washington area, have remained in operation. Chicken George filed for bankruptcy protection last February. Because its creditors would not agree on a new business plan, the fast-food company filed for liquidation in November.

Chicken George was auctioned off on Jan. 13 by court-appointed trustee Howard A. Rubenstein to Hill & Sons Management Co. Inc. of Baltimore for $210,000. Hill & Sons outbid HJ&T Inc. of Baltimore for the Chicken George trade name, secret recipes, machinery and equipment, patents and franchise agreements.

The franchised Chicken George restaurants will remain under the same contract agreements. In addition to the Washington outlets, there are Chicken George franchised restaurants in Los Angeles, Atlanta, Atlantic City and Philadelphia, according to Hill & Sons. One company-owned store in Philadelphia and three of the eight company outlets in Baltimore will not reopen.

"We are planning on opening five restaurants in Baltimore toward the latter part of February," said Jerry Hill, president and chairman of Hill & Sons. "We also plan to plant a strong management team to get {the restaurants} back to being profitable."

The new owners said they plan to increase the number of franchise restaurants. "We plan to expand under a very strong management team and advertising campaign," Hill said. "We want to be off and running on a strong start." It has no franchise operations in Baltimore.

Wilkins McNair Jr., vice president of finance for Hill & Sons, estimated that the company will put an additional $300,000 into the company-owned stores. The company will hire employes to staff the stores and managers to oversee corporate activities.

Hill & Sons, a privately held company, also owns three Amoco gas stations in Baltimore, the Garwyn Medical Center and several residential properties. The company has annual sales of about $11.5 million.

Chicken George was founded in 1979 by Ted N. Holmes and in its early days expanded rapidly. It was one of the nation's largest minority-owned restaurant chains. Holmes said in a 1981 Washington Post interview that he understood marketing, especially to minority groups, but knew little about cash flow.

In 1985, Chicken George ran into just such problems. At the time it sought bankruptcy protection, it owed about $1 million to its private creditors and $400,000 to the Internal Revenue Service. When the company filed for liquidation last November, its assets were turned over to Rubenstein.

Rubenstein accepted a bid for the company from HJ&T, which was founded by Jim Hindman, chairman of car-servicing franchise company Jiffy Lube. HJ&T bid $100,000 on Dec. 31.

Two days later, Hill & Sons pledged $145,000 and objected to the HJ&T bid -- which Rubenstein had submitted to the court.

Rubenstein said he called for the Jan. 13 auction in bankruptcy court "in an effort to get the best price for the creditors."

"We were taking a very aggressive attitude," McNair said, who added that his company was prepared to bid "much higher."

"We view this as a good opportunity, and coupled with hard work, we want to see this work out. This is the kind of challenge that some people walk away from. We want to see it through to fruition," he said.

Bell Atlantic last Thursday bought a privately held Wisconsin company that specializes in the repair and sales of computer parts. Electronic Service Specialists Ltd. specializes in the repair and sales of parts for Digital Equipment Corp. minicomputers. ESS is one of the largest independent companies providing parts and service on the DEC systems, Bell Atlantic said. The company reported sales of $18 million for 1986.

The Department of Energy has awarded UNC Inc. of Annapolis a $57 million contract for the production of nuclear components. UNC, which provides services in the aviation and aerospace, telecommunications and nuclear fields, will perform the work at the naval products division plant in Uncasville, Conn.

Saga Corp., a subsidiary of Marriott Corp., has sold its Straw Hat Restaurants Inc. to Pizza Hut Inc. for an undisclosed price. There are about 100 company-operated Straw Hat Pizza restaurants, Saga said, and the franchise operation will continue to be operated by a subsidiary. Some franchisees may join the Pizza Hut franchise system, the company said. PepsiCo Inc. owns Pizza Hut.

The U.S. Army last week awarded Dynaspan Service Co., a joint venture between Dynalectron Corp. and Calspan Field Services, a $41 million contract to test and evaluate missiles and weapon systems at White Sands Missile Range in New Mexico. -- M.B. Regan