Operations

By Chloe blames pandemic for bankruptcy filing

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December 15, 2020

By Chloe, a plant-based chain with 14 locations in the U.S., has filed for Chapter 11 bankruptcy protection in hopes of staying afloat amid COVID-19, according to a press release.

The chain has obtained new financing from existing investors, which will allow the NYC-based company to continue operating and supporting employees during the process. Investors include QOOT International along with Kitchen Fund, Lion Capital and Bain Capital Double Impact.

CEO Jimmy Haber has stepped down as CEO, and the company's board of directors is searching for a replacement. Chief of Staff Catey Mark Meyers will lead the company in the interim.

"The COVID-19 pandemic hit all sectors of the restaurant industry especially hard, including the fast casual category. In the face of remarkably challenging conditions to operate in, we believe that a complete reorganization of the company is necessary for By Chloe . to emerge and thrive long-term," Mark Meyers said in the release.

"While we are working to retool the brand's operations, the By Chloe experience remains intact and our immediate priority is to continue to serve our loyal guests and preserve the jobs of our valuable restaurant team.

"The financial restructuring is a positive step forward toward our planned growth goals pre-pandemic, which include expansion in the Los Angeles market and internationally in 2021 and enriched investment in a culinary innovation pipeline."

Cheryl Sheppard, managing partner of By Chloe's international business, said the chain is enjoying the increased popularity of plant-based menus since its debut in 2015, as well as during the pandemic.

"From our guac burger to the newly introduced Hot Chicky sandwich, we know our product resonates across diverse audiences and are proud to extend our trailblazing role in the industry," she said in the release. "The working capital support from deeply experienced restaurant owners and operators is a clear demonstration of the brand's future viability and allows us to lay the groundwork for sustainable success."

Young Conaway Stargatt & Taylor, LLP is serving as By Chloe's legal counsel and Ankura Capital Advisors is the financial adviser.

By Chloe has locations in Boston, Massachusetts; Silverlake, California; Providence, Rhode Island; Toronto, Canada and London with plans to grow to three locations in Southern California and open its first outpost in the Middle East in 2021.