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Law360 (May 1, 2020, 6:53 PM EDT) -- Florida restaurant chain TooJay's Deli has filed for Chapter 11 protection, citing the severe disruption in operations caused by the coronavirus pandemic as the reason for the bankruptcy.
West Palm Beach-based TooJay's Management LLC, which operates 28 locations around Florida, said in a bankruptcy filing Thursday that the government orders limiting restaurants to takeout-only operations have made it challenging to maintain the profitability required by the company's lenders.
"The reduction in sales has made it difficult for TooJay's to maintain the level of profitability to which it has historically enjoyed and which it needs to continue operating its businesses," CEO Edward Maxwell Piet said in a declaration filed with the petition.
TooJay's owes about $25.5 million in secured loans to a group of eight lenders, part of a $26 million financing agreement that the company finalized in 2018. The company also owes about $7.3 million in a secured mezzanine loan, according to the declaration.
TooJay's says it has $5.76 million in cash on hand and $619,202 in accounts receivable. The company also has $592,712 in inventories and supplies and $14.8 million in equipment and leasehold improvements, according to the declaration.
Piet said that prior to the pandemic, the business was profitable and had plans to expand into other parts of Florida and elsewhere in the southeastern U.S.
He said the company has taken "proactive measures to reduce expenses wherever possible." The company now has just 290 full-time employees, down from 1,114 on March 29.
The company received a $6.4 million loan under the federal government's Paycheck Protection Program for coronavirus relief, and plans to use it on payroll and future rent, according to Piet.
The bankruptcy filing is meant to preserve the value of TooJay's assets and operations, restructure its debt and work with existing landlords to help the company get through the pandemic, according to the declaration.
"The debtors have successfully operated a profitable enterprise for many years and are well known in the locations in which they operate," Piet said. "They project that the lifting of closures anticipated over the next two months will rehabilitate their operations."
An attorney for TooJay's did not respond to a request for comment Friday.
TooJay's is represented by Eyal Berger, Michael I. Goldberg and Amanda Klopp of Akerman LLP.
The case is In re: TooJay's Management LLC, case number 9:20-bk-14792, in the U.S. Bankruptcy Court for the Southern District of Florida.
--Editing by Abbie Sarfo.
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