The popular Florida deli chain TooJay’s declared bankruptcy as a result of the impacts of coronavirus.
TooJay’s Management, which opened its first restaurant in Palm Beach in 1981, filed for Chapter 11 bankruptcy earlier this week in federal court in the Southern District of Florida. The company owns and operates 28 locations in Florida, including in Hallandale Beach, Fort Lauderdale and Jupiter, according to its website.
TooJay’s tried to cut costs by reducing its full-time employees from 1,114 to 290. It also received a $6.4 million loan from the federal Paycheck Protection Program (“PPP”), which it plans to use for payroll and other expenses, including future rent, according to the company’s bankruptcy filing.
The company said, however, that its “fixed operating costs make it challenging for it to maintain its profitability and other key financial health metrics” required by its lender, Monroe Capital Management.
The Chicago-based private lender had an agreement with TooJay’s to provide a loan of up to $26 million, according to the filing. Toojay’s also obtained $7 million in secured loans from two mezzanine lenders.
As of Wednesday, Monroe Capital was owed $25.5 million, and mezzanine lender Stamford, Connecticut-based Brookside Mezzanine Partners was owed $7.27 million, according to Toojay’s filing.
TooJay’s has between $50 million and $100 million in assets and liabilities, the bankruptcy filing shows. The company’s largest unsecured creditors are Truist Bank for $6.4 million, U.S. Food Service for $1.9 million, and Three Atlanta LLC for $109,000.
Additional bankruptcy filings are expected across the country as restaurants and small businesses struggle to survive due to the impacts of coronavirus, experts say. Last week, the owner of the movie theater chain CMX Cinemas filed for bankruptcy in Miami.