Burdened by PPP loans, BLT Steak owner files for bankruptcy

BLT Restaurant Group said it was unable to meet the requirements for PPP forgiveness due to the closure of indoor dining in New York City.
Bankruptcy filing
Photograph: Shutterstock

BLT Restaurant Group was quick to apply for a Paycheck Protection Program (PPP) loan in April 2020, filing its request as soon as the aid became available as its steakhouses suffered at the start of the pandemic. 

After all, the company said, it did not know how long the funding, or the public health crisis that necessitated it, would last.

Nearly two years later, BLT has filed for Chapter 11 bankruptcy, in part because it hasn’t been able to repay all of the PPP money it received.

Founded in 2004, New York-based BLT owns four restaurants under the names BLT Steak and BLT Prime and manages four others under those brands in New York, Florida, Charlotte, Washington, D.C., and Hawaii. In April 2020, the company received a PPP loan of $3.3 million to help restart operations and pay employees, according to a bankruptcy petition filed March 18.

But BLT said it wasn’t able to operate at anywhere near full capacity for most of the 24-week period covered by the loan. For more than 90% of that time, from late April to mid-October 2020, indoor dining was off limits in New York City. With its Manhattan dining rooms dark, BLT said, it was unable to meet the staffing levels required for full PPP loan forgiveness.

BLT said it spent all of its PPP funds on approved expenses, including 60% on payroll. 

The Small Business Administration (SBA) approved forgiveness of about $1.9 million of BLT's loan in September 2021, leaving about $1.3 million for the company to repay—a sum that remains outstanding, according to the bankruptcy filing. BLT also owes more than $7.8 million on loans from its majority owner, JL Holdings 2002 LLC.

And BLT said its federal aid troubles did not end with that first PPP loan. It filed for a second round of PPP funding in 2021 that, per SBA rules, had to adhere to the same terms as BLT’s first loan, which was made on a consolidated basis. Had BLT been able to apply for loans for its restaurants individually, it would have received $3.4 million rather than the $2 million it got in the second round of funding, according to the filing.

BLT also did not receive a grant from the Restaurant Revitalization Fund (RRF), the $28.6 billion federal package meant to help restaurants recover from the pandemic. The company argued that the program was underfunded and that an examiner made an error while reviewing its application, wrongly denying it a grant of $7.1 million last May, according to the bankruptcy filing.

It was one of the approximately 177,000 restaurants whose requests for aid went unfulfilled by the troubled program.

All told, BLT lost $7.6 million in 2020 before subtracting the expenses covered by its first PPP loan. It continued to lose money as it waited to see whether there would be a second round of RRF aid. Those hopes were all but dashed earlier this month when Congress declined to appropriate additional funds to the program, prompting BLT to file for bankruptcy.

The company has also closed four restaurants—BLT Burger in Washington, D.C.; Casa Nonna and The Wayfarer in New York City; and BLT Steak in White Plains, N.Y.—according to the bankruptcy filing.

BLT’s eight existing restaurants are still operating as it awaits a decision on its petition, which was filed in U.S. Bankruptcy Court for the Southern Division of New York.

The company wants to restructure its debt from JL Holdings and repay its PPP loans over two years. It has also arranged for a $600,000 debtor-in-possession loan from JL Holdings to help it continue operating and make payments, according to the filing.

BLT had not responded to a request for comment as of publication time.

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