Vapiano, a German chain of Italian fast-casual restaurants, said this week that it plans to file for federal bankruptcy protection.
The company, which operates six units in the U.S., has blamed its financial problems on closures related to the COVID-19 outbreak. Vapiano had warned early last week that it was insolvent and requested help from the German government to avoid this step.
On Wednesday, the company said it decided to file an application in Cologne, Germany, to open insolvency proceedings. It also said it has checked whether bankruptcy proceedings must be filed for subsidiaries of parent company Vapiano Group.
“No solution could be found” for the company’s liquidity problem, “which has increased significantly due to the COVID-19 crisis.” The company could not reach a deal with shareholders or banks on a financing solution, and it could not get any help from the state. All of the chain’s locations remain closed “until further notice” due to the coronavirus crisis.
Vapiano serves pizza and Italian fare. It first opened in Germany in 2002 and had been trying to make it work in the U.S.
The potential bankruptcy helps shine a light on the financial state of restaurant companies that face months with little to no sales. Companies that went into the crisis with financial problems face immediate challenges.