Financing

A 48-unit Subway franchisee declares bankruptcy

River Subs LLC, a large operator out of San Antonio, is seeking Chapter 11 debt protection after losing a nearly $3 million judgment in a wrongful death lawsuit.
Subway
A Texas Subway franchisee filed for bankruptcy weeks after losing an appeal of a $3 million wrongful death lawsuit. | Photo: Shutterstock.

A large Subway franchisee out of San Antonio that last year lost a $3 million wrongful death lawsuit filed for Chapter 11 bankruptcy protection late last week.

River Subs LLC, which operates 48 restaurants in Texas, is seeking to reorganize under Chapter 11 bankruptcy. The company listed both assets and liabilities at between $1 million and $10 million, according to court documents, but did not explain a reason for the filing.

Yet its largest debt is over a wrongful death lawsuit filed by the family of Marisela Cadena, a 43-year-old manager with the franchisee was shot and killed by her ex-boyfriend outside one of the shops.

The franchise was founded in 1991 by a trio of operators, Martha Jordan, Cathy Amato and Rick Riley. Riley retired in 2021.

The company said in court documents that it “has continuously employed a majority of minority and low-income team members and developed them into future leaders for Subway.”

The company said 90% of its management started as entry-level workers, which Subway calls “sandwich artists.” Amato and Jordan have served on various Subway franchisee associations and advertising boards.

By 2012, River Subs peaked at 69 restaurants. But the company since then closed 21 of those locations, due to a combination of “restaurant saturation as well as the COVID pandemic.”

The company generated less than $30 million in sales last year and employs 454 workers, according to court documents.

Subway itself has struggled with store closures for years, starting in 2015, amid weak per-unit sales and high costs. The company has closed about 7,000 restaurants over the past nine years. It remains the most prolific restaurant chain in the U.S., with some 20,000 locations.

Cadena was a store manager who was apparently denied a request to transfer to a different restaurant three days before her murder in 2020. Her survivors filed a lawsuit the next year in a Texas state court, claiming that River Subs failed to implement proper security measures.

An arbitrator ruled in the family’s favor last year, and earlier this month River Subs lost an appeal of that decision.

The bankruptcy filing is designed to reorganize the business, and Jordan and Amato continue to operate the business.

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