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Financing

Cosi says a sped-up bankruptcy hearing is its ‘only realistic hope’

A judge granted the fast casual’s request for an expedited hearing so it can apply for Restaurant Revitalization Fund aid.
Cosi
Photograph: Shutterstock

Cosi, which filed for Chapter 11 bankruptcy protection more than a year ago, has asked a judge to speed up the proceedings so the fast-casual chain can be eligible for federal relief funding for struggling restaurants.

A judge approved Cosi’s motion for an expedited hearing and has scheduled proceedings to take place next Tuesday, according to documents filed in U.S. Bankruptcy Court in Delaware late last month.

“The Debtors’ only realistic hope of emerging from bankruptcy, and avoiding a conversion and liquidation, hinges on their being able to successfully apply for a grant for the Restaurant Revitalization Fund,” Cosi wrote in its filing. “The Debtors believe that they qualify for a grant of $10 million dollars, which they believe would allow them to confirm, and go effective, on their plan.”

In February 2020, the Boston-based soup and sandwich brand declared bankruptcy for the second time since 2016. The struggling chain had closed 30 units a couple of months before the filing and was preparing to put itself up for sale.

In April 2020, Cosi filed suit against the U.S. Small Business Administration over its requirement that companies in bankruptcy can’t receive federal stimulus money. A judge denied Cosi’s request in that case.

The first applications for up to $10 million in Restaurant Revitalization Fund assistance were accepted Monday, and industry leaders fear the $28.6 billion fund could run out of cash before many restaurants get a chance to apply for aid.

“The Debtors’ hopes hinge upon their being in a position to apply for an RRF Grant as early as possible,” Cosi wrote in its motion.

Cosi said it intends to apply for the RRF grant as soon as its reorganization plan is confirmed.

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