Operations

Garbanzo files for Chapter 11

Provided

August 17, 2020

Colorado-based Garbanzo Mediterranean Fresh is hoping to make a comeback after filing for Chapter 11 last week in the Eastern District of Missouri, where majority shareholder and real estate mogul Michael Staenberg lives.

CEO James Park told FastCasual the pandemic had forced him to make the move. Twelve of the company's 25 locations — which are in non-traditional settings like universities and airports — have been closed since mid-March.

"The decision to voluntarily file was entirely brought on by the unprecedented and the sudden impact of Covid," he said. "During this time our restaurants will remain open with normal operations. We will also continue to provide the same superior service and support to our team members, customers, and franchisees; as they are the backbone to of our success."

All Garbanzo locations will reopen by month's end, and while some locations had improved sales over 2019, Park told the Denver Business Journal the filing was still a necessity. He and his team are exploring the possibility of working with a partner as well as coming out of bankruptcy alone and in the meantime are honoring contracts with suppliers but hoping to renegotiate with many landlords.

The chain is also pushing ahead with plans to open six locations next year, including one inside the Denver International Airport, and Park is seeking franchisees to continue to expand the brand.

The company's bankruptcy petition listed Garbanzo as having estimated assets between $1 million and $10 million and estimated liabilities between $10 million and $50 million. Its largest listed unsecured creditors were Staenberg's MHS Trust and Gemini Investors, a Massachusetts-based investor in middle-market private companies, which is Garbanzo's second-largest shareholder.

"We were having one of our best years in 2020 going into March. And then one day everything went to zero," Park said in told the Denver Business Journal. "But this is the restaurant business, and we are resilient. The entrepreneurial spirit is vibrant. And I think we are not going to miss a beat. For all businesses, 2020 is a year that will be put down with an asterisk next to it."

Garbanzo opened in 2007 and for the past several years has landed on the list of Fast Casual Top 100 Movers and Shakers.