Matchbox Food Group, a 12-unit Washington D.C.-based casual-dining operator, declared bankruptcy on Monday, saying it plans to reorganize its business and could close locations.
The company listed between $50 million and $100 million in liabilities, including loans to Eagle Bank, one of which is a $5.6 million Paycheck Protection Program loan, along with funds owed to investors Thompson Hospitality and Potomac Investment Trust.
Matchbox submitted 12 different bankruptcy filings for individual locations on Monday. The company has units throughout Washington D.C., Maryland, Virginia, Texas and Florida.
In a statement, Matchbox board member Edwin Sheridan said the filing “will allow us to right-size our balance sheet and position the business for growth going forward.”
The filing continues a challenged couple of years for Matchbox, whose flagship concept serves a broad menu featuring pizza and mini burgers.
Thompson Hospitality Group made an $11 million investment in Matchbox in 2018. The deal at the time gave Thompson the right to acquire enough of the company to have a majority stake, but on Monday a company representative said that Thompson never acquired the additional equity.
Thompson is described as neither a minority nor a majority investor but has been managing the brand for the past two years.
It would take a larger role with the company and could purchase the chain if the court approves. “The Matchbox brand now has a clear path forward that enables us to be flexible in any environment,” Sheridan said. “We are confident that we will emerge stronger.”
Matchbox had struggled for years, shuffling through CEOs while the brand’s founders were embroiled in lawsuits with the company’s investors. In 2018 Matchbox sold off its five-unit Ted’s Bulletin chain to Salis Holdings.
In a statement, Sheridan suggested the company would use the bankruptcy process to renegotiate leases or close them. “We aim to work with the landlords for each of our locations to find agreeable terms that will allow us to keep our restaurants open and continuing serving our customers,” he said. “If that is not possible, we will be forced to close locations.”
The company said it has “taken steps to minimize any business disruption through this process” and says its restaurants are serving customers.