Taylor Gourmet filed for Chapter 7 bankruptcy protection on September 27. The Washington, D.C. sandwich chain, which shuttered all of its locations this past weekend, will sell off remaining assets. Chapter 7 bankruptcy, often referred to as “straight” bankruptcy, typically allows debtors to eliminate unsecured debts quickly by surrendering their assets. It provides for the liquidation of the debtor’s assets, such as nonexempt property, with the proceeds of the liquidation going to creditors. The more common Chapter 11 bankruptcy allows businesses to restructure their debts and pay them back over time.
In other terms, Taylor Gourmet isn’t likely declaring bankruptcy in hopes of emerging as a more profitable organization.
Taylor Gourmet filed 26 separate bankruptcy cases in federal bankruptcy court. The 19-unit brand, which had 17 restaurants in D.C., had between $10 million–$50 million in liabilities and $1 million–$10 million in asset, according to the filing.
The upscale hoagie closed its two Chicago stores after service last Friday and its D.C.-area units after Sunday’s service.
According to a report in Washingtonian, the closures came after private equity firm KarpReilly, which invested more than $5 million into the concept in 2015, backed out of its support. In addition, a spokesperson for Taylor Gourmet told Washingtonian that the concept had grown too quickly, and earlier reports indicating that the company was planning to close a handful of D.C. locations pointed to rising real estate costs as the culprit.
However, the Washingtonian report also noted that the company was suffering from a sales downturn that began after Taylor Gourmet cofounder Casey Patten visited with President Donald Trump in January 2017 for a round-table discussion. That visit sparked an outcry from many of the concept’s customers, who urged a boycott.
Patten defended the visit with Trump, noting that he used the opportunity to discuss the president’s stance on immigration in support of his employees. Patten also said at the time that he was “apolitical.” Indeed, Taylor Gourmet first made waves on the national scene in 2012 when then-president Barack Obama visited and hosted a roundtable discussion for small-business owners. Obama and former vice president Joe Biden visited the concept on multiple occasions.