GRAND RAPIDS, Mich. — The parent company of HopCat, Stella's and Grand Rapids Brewing Co. has filed for Chapter 11 bankruptcy.
BarFly Ventures' debt has "become untenable because of the COVID-19 pandemic, in addition to other reasons," according to the company today.
The Grand Rapids-based company is working on a "comprehensive financial restructuring," to strengthen its balance sheet and be "better positioned for long-term growth."
BarFly hopes the bankruptcy filing will "swiftly facilitate" its restructuring and reduce the debt exacerbated by the mandated closures of its restaurants by the state of Michigan and other states in response to the COVID-19 pandemic.
The filing was made with the U.S. Bankruptcy Court in the Western District of Michigan.
BarFly said it will operate "in the ordinary course through this process."
The company is a also planning to re-open all of its Michigan restaurants, effective June 13, to dine-in customers, with its restaurants in Indianapolis and Lincoln, Nebraska opening on June 22.
"This action should have little to no impact on our day-to day-business operations, but will allow us to emerge as a financially stronger company and enable us to continue serving our guests, team members and other business partners for many years to come," said Mark Sellers, founder, BarFly Ventures.
BarFly expects the restructuring process to be "seamless" for customers, employees and vendors and intends do the following:
— Honor customer programs, such as gift cards and HopCat loyalty rewards
— Pay employee wages and benefits in the ordinary course of business
— Pay vendors and suppliers in a timely fashion going forward
"As is the case with most restaurants, BarFly has faced a number of challenges in recent years, including increased industry competition and craft beer saturation," Sellers said.
"However, we were meeting these challenges, and operationally, the business was sound until the recent global pandemic pushed us into an unforeseen economic crisis and a 100% drop in revenue for almost three months.
"After an exhaustive examination of all options, we've determined that the Chapter 11 process is the best path forward to enable BarFly to focus on continued growth and transformation for the future."
Pachulski Stang, Ziehl & Jones and Warner, Norcross + Judd are serving as legal advisors to the company.
Rock Creek Advisors is serving as its financial advisor, and Mastodon Ventures is serving as investment banker.