Fig & Olive, a nine-unit upscale Mediterranean concept that was struggling pre-coronavirus, is the latest restaurant chain to declare bankruptcy amid the pandemic.
Seeking Chapter 11 protection will allow the chain to reorganize, and untangle itself from some of its leases, while continuing to operate some of its restaurants, according to a declaration filed late last week in U.S. Bankruptcy Court in the Southern District of New York.
Fig & Olive, which opened its first unit in 2005 and has nine restaurants in five markets, is seeking to get out of four of its leases as part of the bankruptcy proceedings, while also asking to pay 25% of current monthly rent obligations, citing coronavirus-related hardships.
Even before the pandemic, the chain had been in financial trouble following a salmonella outbreak in 2015 at two of its stores.
“The negative press triggered a downfall in revenue,” according to the bankruptcy declaration.
In 2017, Guillaume Fonkenell became majority owner of the brand, as part of a leadership reorganization that sought to get the chain on solid footing again.
“Since in or around 2015, and ongoing to today, the debtors have been plagued by lawsuits both related to the outbreak, as well as a series of frivolous employee lawsuits,” the filing states.
Amid stay-at-home orders in March, the company closed all of its restaurant sand laid off or furloughed more than 700 employees. Fig & Olive retained 34 employees, at reduced salaries, and is currently operating just four of its stores at reduced capacities.
Fonkenell will consult with restaurant managers about which units could be viable and will loan the brand money to foot the reorganization bill, according to the documents.
The pandemic has forced a number of restaurant operators to declare bankruptcy in recent weeks, including NPC International, the largest Wendy’s and Pizza Hut franchisee, as well as Chuck E. Cheese, Twisted Root Burger Co., Souplantation and Sweet Tomatoes, and others.