On April 11, 2020, FoodFirst Global Restaurants filed for Chapter 11 Bankruptcy protection. The company owns Brio Tuscan Grille, which currently has a location in Gilbert. The restaurant chain previously had an additional location in Scottsdale. Fans and employees of the restaurant are curious as to how bankruptcy will affect it.
FoodFirst opted for a Chapter 11 Bankruptcy, as opposed to a Chapter 7, which allows it to continue operating. While the company will retain control of day-to-day operations, a panel of its main creditors will oversee larger business decisions. Its debts will be reorganized and paid in a method the panel agrees upon. A Chapter 7 would have discharged the company’s debts, but forced it to close.
FoodFirst bought the Brio and Bravo Italian chains in 2018 for $100 million. It reported sales of $307 million in 2019, which was below the company’s expectations. The chain began closing locations in late 2019 and early 2020, including the Scottsdale location. FoodFirst has 20 restaurants whose leases end in 2020 and will have to decide whether or not to keep those locations open.
Since FoodFirst was showing some public signs of struggle last year, it isn’t too surprising that the company filed bankruptcy. Restaurants have been hit particularly hard by the pandemic, with most states having shelter-in-place orders that restrict service to drive through and take out. Frank and Lupe’s, a Mexican restaurant with locations in Scottsdale and Ahwatukee, has also filed for Chapter 11 bankruptcy protection. Sweet Tomatoes aka Souplantation is sadly filing for bankruptcy and doesn’t plan to ever reopen because of how difficult it would be to operate a buffet-style restaurant with COVID-19 reopening protocols.
If you are a business owner considering bankruptcy, you will have to decide between Chapter 7 and Chapter 11. For individual filers, Chapter 7 and Chapter 13 are available. If you have questions about which Chapters you qualify for and how the process works, our office is available to help. As legal services were declared essential services in Arizona, we are available for phone consultations and can file your case completely remotely. The first step is by consulting with one of our experienced bankruptcy professionals, so call to schedule your free consultation today.