The restaurant industry has endured economic hardship this year as several restaurant chains have filed for Chapter 11 bankruptcy reorganization as well as Chapter 7 liquidation.
Many of these establishments claimed they had not recovered from the Covid-19 pandemic and had felt the negative effects from rising costs caused by inflation.
Related: Popular craft brewery closes as owner files Chapter 7 bankruptcy
The most notable restaurant bankruptcy this year has been Red Lobster's Chapter 11 filing on May 19, as the casual restaurant chain closed 93 locations nationwide. Court filings showed that 228 of the chain's restaurants were not profitable in their current lease situations, which could lead to another 135 restaurant closings.
The company had said that among the financial difficulties it had dealt with was an $11 million loss as a result of its "Ultimate Endless Shrimp" promotion.
Other notable restaurant bankruptcies this year include Tex-Mex chain Tijuana Flats Restaurants, which had as many as 123 locations. The fast-casual chain on April 19 filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Middle District of Florida, was sold to a new ownership group and closed 11 of its locations.
Related: Restaurant chain faces new risk to Chapter 11 bankruptcy survival
Mexican fast-casual chain Rubio's Coastal Grill suffered from a spike in the minimum wage in California and on June 5 filed for Chapter 11 protection to restructure its debt and close 48 locations in the Golden State. The restaurant chain, which had 150 locations at its peak, had 134 units in California, Arizona, and Nevada before closing the 48 restaurants.
Another popular fast-casual restaurant Foxtrot and Dom's kitchen Market on April 23 unexpectedly closed down all its locations in Texas, Illinois and the Washington, D.C. area and filed for Chapter 7 bankruptcy liquidation
Foxtrot and Dom’s Kitchen & Market offered freshly made sandwiches and baked goods, crackers, bread, cereal, bottles of organic wine and even supplements like magnesium.
Image source: Shutterstock
Melt Bar & Grilled seeks to reorganize in Chapter 11
Popular casual restaurant chain Melt Bar & Grilled on June 14 filed for Chapter 11 bankruptcy protection on June 14 in the U.S. Bankruptcy Court for the Northern District of Ohio. The company had suffered financial difficulties from increased food and labor costs caused by inflation. It also faced lawsuits filed by landlords.
The debtor sought bankruptcy protection to restructure its debts as it reportedly had been having difficulties making payments to its landlords, providers and vendors, Nation's Restaurant News reported.
More bankruptcy:
- Struggling restaurant chain operator files Chapter 15 bankruptcy
- Popular movie theaters owner files Chapter 7 bankruptcy
- Struggling furniture chain files Chapter 11 bankruptcy
Melt listed $500,000 to $1 million in assets and $1 million to $10 million in liabilities.
The debtor's bankruptcy filing listed a $4.8 million ordinary income business loss for the calendar year ending 2022, Cleveland.com reported.
The bankruptcy filing will place an automatic stay on all legal actions against Melt. These include lawsuits filed in county courts in May by landlords in Avon, Canton and Columbus, Ohio, for unpaid rent.
The Lakewood, Ohio, restaurant chain, founded in 2006 by Matt Fish, grew to 14 locations by 2017, but faced financial difficulties following the Covid-19 pandemic in 2020. It currently lists six locations on its website, consisting of restaurants in Akron, Columbus, Lakewood and Mentor, Ohio. It also has satellite locations at the Cleveland Guardians' Progressive Field and at Case Western University in Cleveland.
Melt Bar & Grilled specializes in gourmet grilled cheese sandwiches, craft beers and signature drinks. The restaurant also features a vegan menu with vegan grilled cheese, vegan mac and cheese, tofu wings, and other items.
Related: Veteran fund manager picks favorite stocks for 2024
