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A POPULAR 65-year-old pizza chain with 10 restaurants has become the latest to file for bankruptcy.
Mary’s Pizza Shack Corporation announced the news on Tuesday – marking a significant moment for the well-known chain.
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Mary’s granddaughters will acquire the brand, according to the Sonoma-based company.
Documents filed with the U.S. Bankruptcy Court for the Northern District of California claim the pizza chain has between $100,001 and $500,000 in assets between 1,000 and 5,000 creditors.
All 10 of Mary’s Pizza Shack restaurants will be staying open and there are no closures planned for additional locations following a wave of closures that occurred between 2022 and 2023.
In a news release on Wednesday, Mary’s Pizza Shack said: “This year, we celebrated 65 years of being in business, and we’re not going anywhere.
“The legendary recipes you grew up on are staying the same and gift cards will continue to be honored and sold at all locations.”
The well-loved pizza brand announced in 2022 that it was restructuring from a single corporation to smaller family-owned restaurants run by third and fourth-generation owners.
To preserve Mary’s brand, each restaurant is now individually owned and operated by extended family members of Mary Fazio – the founder.
This is instead of operating under one corporation.
Mary started her brand in Boyes Hot Springs back in 1959.
The company has closed its doors on multiple restaurants across the North Bay including downtown Santa Rosa, Sebastopol, Dixon, Napa and Novato.
The closures were reportedly due to declining revenue and rising food and labor costs.
It comes as BurgerFi, a fast-casual burger chain, has filed for Chapter 11 bankruptcy protection after closing down several restaurants.
The filing was made on September 11, marking a significant moment for the well-known chain.
According to the filing in the District of Delaware, BurgerFi and Anthony’s Coal Fired Pizza — which is owned by the burger chain — report assets ranging from $50 to $100 million and liabilities reaching up to $500 million, per National Restaurant News.
This bankruptcy filing comes less than a month after BurgerFi warned investors of potential financial trouble, per the outlet.
The company noted that it was unable to report its latest quarterly earnings on time due to “significant adverse developments” affecting its business and liquidity.
The company’s financial difficulties were exacerbated by its recent challenges.
Earlier this year, BurgerFi received $2.5 million in funding from Trew Capital Management Private Credit 2 LLC, which required the company to demonstrate its plan to use the funds to address its credit obligations.
BurgerFi had previously entered into a forbearance agreement with creditors, extending until July 31, while considering “strategic alternatives” to stabilize its finances.
How does bankruptcy work?
Bankruptcy is a specific legal process that helps companies eliminate debt they can’t repay.
The process allows businesses to start fresh and gain access to new credit.
Supervised by federal courts, bankruptcies allow a company to sell off its assets more easily to pay off creditors, according to Investopedia.
Chapter 11, a common process for companies, is used to restructure a business with the goal of remaining open – even if it means selling off most of the company’s properties.
Chapter 7, on the other hand, sells all of a company’s assets, putting it out of business.
Chapter 15, alternatively, allows for collaboration between American and foreign courts to conduct bankruptcy proceedings with “parties of interest involving more than one country,” per the United States Courts.
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