Financing

The owner of Boston Market has filed for bankruptcy again

Jay Pandya, who declared personal bankruptcy in December only to have it terminated, is again seeking debt protection after his company lost a lawsuit filed by US Foods.
Boston market
Boston Market's owner has filed for bankruptcy again. | Photo by Lisa Jennings.

The owner of Boston Market is giving bankruptcy court another shot.

Jignesh “Jay” Pandya and his wife, Mital, on Friday declared personal bankruptcy in Pennsylvania, less than a month after a previous attempt was terminated by the court over technical reasons.

This time, the filing followed a judgment of $15 million awarded to US Foods, which had sued Boston Market over unpaid bills. The bankruptcy filing lists a $10 million debt to the giant distributor.

The bankruptcy filing says that Pandya has both assets and liabilities worth $10 million and $50 million. It also says the liabilities are mostly business debts.

The filing does list some business creditors, including Pizza Hut and PepsiCo. Pandya is a former Pizza Hut franchisee who was terminated in 2018 over unpaid royalty and ad fund payments. Those locations closed the next year. Pizza Hut sued Pandya and was later awarded $11 million.

Pandya acquired both Boston Market and Corner Bakery in a pair of surprising deals in 2020. Both brands then stopped paying many of their bills before demanding steep discounts, leading to lawsuits from vendors and employees and countless evictions. The brands combined were sued more than 200 times.

Corner Bakery filed for bankruptcy last year and was sold to a company that acquired its debt on the secondary market.

But Boston Market, which started 2023 with about 300 locations, has remained in Pandya’s hands. The company has closed about two-thirds of its locations since then, many due to evictions over unpaid leases. It has been fined by the states of New Jersey and Massachusetts after workers weren’t paid. And it is under investigation by the U.S. Department of Labor.

Boston Market has not filed for bankruptcy. In a statement sent via text, Pandya directed his ire at US Foods.

“Boston Market is standing strong,” Pandya said. “US Foods has overcharged and we provided all detailed invoices to prove that. Unfortunately, the judge did not review those. We will be filing an appeal soon.”

(For more on the Boston Market saga, read The Demise of Boston Market.)

US Foods sued Boston Market last year over unpaid bills. A judge last month issued a default judgment in the distributor’s favor, awarding the company $12 million. That was later upped to $15 million in unpaid bills, interest and attorneys’ fees.

Boston Market responded that it disagreed with the decision and would appeal.

Among other creditors listed in Pandya’s filing are Kishan and Jagdish Patel, to whom Pandya apparently owes $6 million. Pandya settled a 2015 lawsuit accusing him of talking Jagdish Patel into investing millions into his Pizza Hut restaurants, only to pocket the funds and not use any to fund his restaurants.

Pandya and his wife initially filed for personal bankruptcy in December, listing the business debts in the process. A bankruptcy court trustee, however, recommended that the filing be terminated after Pandya didn’t provide insurance data on a pair of rental properties he owns.

The judge in the US Foods case called the December bankruptcy filing a “short-lived detour through bankruptcy court” that “looks to be another delay tactic.”

As Pandya’s bankruptcy case was terminated, Boston Market announced plans to let any existing business sell the chain’s branded menu items without any buy-in requirements. The company also vowed to regularly introduce new menu items from a different international cuisine, starting with Chicken Tikka and Biryani.

UPDATE: This story has been updated to include a comment from Jay Pandya.

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