Financing

Jay Pandya, who owns Boston Market, files for personal bankruptcy

The operator of the struggling rotisserie chicken restaurant chain is also accusing US Foods of overcharging for food and keeping supplies low, leading to substitutions and closures.
Boston Market
Boston Market has closed numerous locations over the past year. The company blames US Foods for the problem. | Photo by Lisa Jennings.

Jay Pandya, the owner of the struggling Boston Market chain, declared personal bankruptcy last week, according to court documents.

Pandya, who lives in Newtown, Pa., filed for Chapter 11 bankruptcy protection as an individual, not as a business. He claims between $10 million and $50 million in both assets and liabilities.

The filing came around the same time that Boston Market accused US Foods of overcharging for food. The chain also blamed some of its restaurant closures on the distributor, saying that US Foods failed to keep enough of its products on hand, which led to supply shortages and closures.

The response came more than four months after US Foods filed its lawsuit against Boston Market, claiming that the chain failed to pay nearly $11 million in bills dating back two years. US Foods has asked a court to rule in its favor, citing Boston Market’s failure to respond to that lawsuit.

Among the unsecured creditors listed in Pandya’s bankruptcy filing is US Foods, which is listed with a claim of $10 million.

The flurry of activity also comes as Boston Market continues to close locations, according to various local reports. Seven Boston Market locations across Connecticut closed abruptly last month after being served eviction notices.

Evictions have also led to closures in South Florida, according to reports there in the media and from former employees.

Pandya bought Boston Market in 2020, coming out of nowhere to acquire a chain that had been in decline for more than two decades. He later acquired Corner Bakery, buying both chains for low prices. Corner Bakery was sold earlier this year, after declaring bankruptcy. 

But both brands under his watch instituted severe cost cut requirements and demanded steep discounts before they would agree to pay bills. Boston Market alone has been sued over 140 times in the three years since the acquisition, mostly for unpaid bills. The company is under investigation by the U.S. Department of Labor over unpaid wages.

(Read more about the Boston Market problems here.)

It’s uncertain what impact the personal bankruptcy filing could have on Boston Market. In the section of the court documents asking whether the filer is the sole proprietor of a business, either full or part-time, the box is checked “no.”

Pandya has yet to respond to a request for comment.

US Foods sued Boston Market in July. The company failed to respond to the lawsuit by the end of October. That prompted US Foods to ask a court for summary judgment and an award of $11.9 million.

Attorneys for Boston Market called a summary judgment a “harsh sanction” and said the company simply “missed a deadline.” And the company noted that the delay, seven and a half weeks, “was modest for the timetables of litigation.”

The response said Pandya received a call “some time in late August or early September” from “someone notifying him about a lawsuit involving Boston Market.”

Pandya, however, knew about the US Foods lawsuit in late July, when, in an interview, he vowed to resolve the issue. But he also accused the distributor of overcharging back then. “We need to pay the right and correct amount,” he said at the time. “We believe the discrepancies are huge.”

US Foods argued that Boston Market signed a promissory note in January, agreeing to pay $11.6 million, and soon reneged on that agreement. Pandya in July said that he “had no choice” but to sign the note, and that the company had held him “hostage.”

In its counter claim, Boston Market said that US Foods “failed to charge Boston Market the correct delivered price” according to its agreement with the restaurant chain. The company also said that US Foods said its charges were “accurate” whenever the company complained.

Boston Market in negotiations that started last year said it agreed to the promissory note because US Foods threatened to terminate the agreement and “the loss of products would have been catastrophic.”

But the company then said that US Foods failed to maintain proper inventory levels and that the distributor stopped making purchases of products Boston Market needed to operate its restaurants. In some cases, the distributor “stocked inventory of products of inferior quality.”

Boston Market then said the depleted inventory and product delays led to “a substantial number of Boston Markets” that were “compelled to cease operations.” As such, the company said, it was unable to make payments.

In other words, Boston Market said, US Foods’ inability to keep enough product on hand contributed to the chain’s financial problems, making it unable to pay its bills for distribution.

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