At Behm Law Group, Ltd., we work with individuals filing for Chapter 7 liquidation and Chapter 13 reorganization bankruptcy. We also help local businesses file Chapter 7 cases and offer legal guidance and protection to family farmers and fishers working through Chapter 12 reorganization bankruptcy. In the past year, COVID-19 has hit everyone, but it has been especially hard on the restaurant industry. Many restaurants and other food service companies closed down or filed for business bankruptcy. Although Behm attorneys don’t work with businesses filing for reorganization through Chapter 11 business bankruptcy, we still find it important to take note of bankruptcy patterns in current events. Since the coronavirus shutdowns in early 2020, there has been a sharp increase in bankruptcy filings by many in the restaurant industry in Waseca, MN and across the country.
While it’s unfortunately common and often expected for small or family-owned restaurants to struggle during times of economic depression or other financially restrictive events, like a forced temporary closure, the large corporations that own restaurant chains are usually safe from that fate. However, with the prolonged closure during the pandemic and decreased customer bases because of the fear of viral spread, many restaurant chains filed for bankruptcy during the past year.
Ten U.S. restaurants chains that filed for bankruptcy in 2020:
- Bar Louie: Owned by Sun Capital Partners, Bar Louie’s chain filed for bankruptcy on January 27th with unlisted assets.
- Cosi: Cosi filed for bankruptcy on February 24th with $40 million in assets.
- Bravo Italian Kitchen: FoodFirst Restaurants, owners of Bravo (also of Brio Tuscan Grill), filed for bankruptcy on April 10th with assets of $307 million listed.
- Souplantation: Owned by Garden Fresh Restaurants (also owners of the Sweet Tomatoes chain), Souplantation filed on May 14th with $50 million listed in assets.
- Le Pain Quotidien: Owned by PQ New York 9, Le Pain Quotidien filed on May 27th with $3 million listed in assets.
- HopCat: HopCat owners BarFly Ventures (also owners of Stella’s Lounge and Grand Rapids Brewing Co.) filed for bankruptcy on June 3rd with $1 million in assets listed.
- Chuck E. Cheese: With an impressive asset listing of $1.7 billion, Chuck E. Cheese owners CEC Entertainment filed for bankruptcy on June 25th.
- California Pizza Kitchen: CPK owners Golden State Capital filed on July 29th with $13.5 million listed in assets.
- Sizzler: Sizzler USA filed on September 21st, 2020 with $1 million listed in assets.
- Ruby Tuesday: With assets listed as $146 million, NRD Capital Management, owners of Ruby Tuesday, filed for bankruptcy on October 7th.
While the majority of chain restaurants that filed for bankruptcy in 2020 petitioned for Chapter 11 reorganization, there have been hundreds of smaller companies that had to file for Chapter 7 bankruptcy relief this past year.